Ironically, in a week where Microsoft was forced to fend off rumors that it was close to releasing MS Office for the iPad, Silicon Valley-based OnLive provided a live demonstration of Windows, Word, Excel, and Internet Explorer all running on the device.

OnLive CEO Steve Perlman was on hand to introduce a new tier to the company’s virtual Windows client named OnLive Desktop Plus. The service, which will cost $4 per month, provides subscribers with access to a cloud-accelerated web browsing experience, access to Adobe PDF Reader, and priority access to OnLive’s servers, all within a virtualized Windows environment.

Perlman explained that the company’s patented technology for its low-latency server-based gaming service also allows it to accelerate web-browsing in a unique manner.

Essentially, he told TabTimes, because OnLive’s servers have fast, 10 Gigabit connections, and because Internet Explorer is operating in a virtual environment, it is able to send and receive data far faster than it would over a normal network, all while using less data. “This is the fastest browser in the world, and the least consumptive,” Perlman said.

Explanations aside, TabTimes tests of the virtual web browser provided startling results. Using Speedtest.net, we clocked download rates of an astonishing 600 megabits per second, and upload rates of close to 200 mpbs.

What about real-world rates? Using the OnLive Desktop Plus service on our iPad at the TabTimes office in San Francisco on a 3G connection, we were able to use the server to access Dropbox via Internet Explorer and download several 25MB files in a single second.

Beyond the fast data rates, the other advantage to using Internet Explorer in OnLive Desktop’s virtual Windows environment is the ability to view Flash-heavy sites and Flash video in native form.

OnLive Desktop Enterprise now available

In coming months, the company will release its OnLive Desktop service for Android tablets.

Also pending: an OnLive Desktop Pro experience for $9.99 a month. This tier of the service will provide users with the complete MS Office suite, 50GB of storage, and the ability to add additional Windows applications.

Later in the year, OnLive Desktop collaborative services will provide live desktop spectating and sharing with voice functions for up to thousands of simultaneous users.

The company’s enterprise service, which allows larger corporations and IT administrators to build their own custom virtual environments for mobile devices—including Linux installations—is available now. More details can be found on the company’s site.