Hasn't this already been done with Java applets? Would the difference here be that instead of running Java, you could run almost any language?
More than just any language - any Linux software.
I don't have a Mac, so I haven't tried out your demo yet, but ideally you should make this work like genymotion, using the existing VirualBox install in headless mode. This would also make a much quicker install option for existing vbox users. Hopefully you can avoid the mistake YouWave made of interfering with an existing vbox installs.
It will only work with OS X 10.7+ though.