In my experience the video compression on PS Now is very noticeable, especially in dark scenes. Lag is usually fine at least for games that aren't particularly lag sensitive, but there are days when it's spiking so much it's unplayable (and online games installed locally are fine). I haven't been using the streaming much recently, though: now that it lets you download most PS4 games there's not much point to the streaming except for those games that require it or quickly trying out a game or playing on a non-PS4 device.