You can't use the iPad's native onscreen keyboard with OnLive Desktop either, just the too-small-to-type-on Windows 7 onscreen keyboard, whose poor design makes it float above whatever you are working on, requiring constant pushing around the desktop. And you can't use basic gestures like zoom, which is a big problem because OnLive's Windows desktop is too big for the iPad's screen resolution, causing it to be shrunk to fit and making everything tiny and unreadable. (I had to use reading glasses.) There are no UI controls for OnLive Desktop in the app nor in the OnLive Desktop section of the iPad's Settings app. Worse, the OnLive Desktop's Windows environment has no Control Panel, so you can't use Windows' own UI customization capabilities to change the display settings.
The only iPad capabilities you can use are fingers to access Windows 7's limited gesture capabilities, a finger or stylus to conduct mouse movements within Windows apps, and an external Bluetooth keyboard to type with. You can use an iPad's Bluetooth keyboard but not the iPad onscreen keyboard.
Any files in the OnLive Desktop environment get there via OnLive's website upload and download page (desktop.onlive.com), not via the OnLive Desktop app. That's clunky enough, but it gets worse: You can't upload files from your iPad's browser, because the iPad doesn't use a traditional file system. iPad apps exchange files with each other and with cloud services such as Dropbox through the iOS Open In mechanism. Unfortunately, OnLive Desktop doesn't support iOS Open In for taking in files. If you're on the road and you want to work on an Office file you get via email or is in your corporate cloud storage account, you can't access it in OnLive Desktop. What you can do, ironically, is go to the OnLive Desktop files list via the iPad's browser and open a file by tapping its name -- but that file only opens in a native iPad app that supports Open In, such as the built-in QuickLook viewer or a commercial app such as Apple Pages, Quickoffice, or GoodReader.
It's also key to understand that OnLive Desktop works only when you have a live Internet connection of 1.5Mbps or faster (and if the OnLive servers have enough capacity for your session). You can't use OnLive Desktop over 3G connections. That further limits its utility. Most people will do better to use a native app they can guarantee is always available, even offline, and can work with the documents already on the iPad, sent via email, or hosted at a cloud storage service.