I'm confused at the confusion, but i'm probably just tired :
you buy a game and install it - then it's registered as being owned by you "in the cloud" via a game+user id association.
You brick your machine and you get a replacement and then you can redownload the games you already have a license for - just like steam. If you kept the disks you reinstall and it knows you already have a license for that game and doesn't attempt to charge you. I suspect this might all be done with activation codes a la PC too - it's the easiest way. New physical games then act -just- like PC games, second hand games go "please enter your code - if you don't have one, please click here to purchase one"
Also - when Steam gets brought up it misses one big thing - you buy something on steam , it's yours forever and, until a -major- architecture shift happens in PC land, will remain that way for a long time. MS and Sony have both pulled shit where previous -downloaded- games are no longer playable on the next iteration of hardware so this is -not- the same as Steam.
edit :
haha, the worst thing? your system becomes a brick until you connect again.
i've missed this part it seems - so they are going to ask you to log in every 24 hours to validate games you've already validated? I don't understand why that would be. I suspect there might be something more to it that there is some mechanism to try and force the online connection for cloudy/experience related shit (translation : upload usage data so they can market to you more agressively)