To do this, NVIDIA needs to compress a video stream fast enough and with sufficient quality. Given what the company has done with GeForce grid (which is used by Gaikai), there is no question that it has the know-how. Additionally, the low-latency of a home network should make that a walk in the park, mostly.
That said, making it work on a low-power device is probably what makes it challenging. Fortunately, the Tegra 3 chips already have dedicated video hardware, although it is usually more dedicated to de-code, and encode. However, from NVIDIA’s whitepaper (.pdf link), it looks like they managed to use dedicated hardware for all of it.
Now, NVIDIA and the WiFi Alliance have to convince display and TV manufacturers to embed Miracast in their products. So far Intel’s WiDi has only had limited success and Apple’s Airplay has too much latency to do anything more than streaming video or music, after a buffering delay. What do you think? How would you use such a feature if it was integrated in your TV?