This seems reasonable enough. By doing the rendering on their servers, rather than the user's computer, they can deliver the service to anything with a reasonable web browser (and that's pretty loosely defined, as their marketing video shows them targeting Chrome, Safari, and Opera as well as IE and Firefox). I do find myself wondering just how much compute power they're going to have available, though, and just how well their service will scale as the user base grows. Rendering is one of the more compute-heavy things you can do, after all.
What has me concerned about the whole thing is that they have a selection of default avatars, and one of them is the Tron Guy. I'm pleased and flattered on the one hand, but there's this voice that whispers in the back of my mind about control of my own likeness and royalties. Do I need to just smile and accept it, or do I need to try to have a lawyer say, "Hey, wait a minute here. You're going to make money off this guy, and he deserves a cut."?
Take a look at the marketing video and decide for yourself: