Work on running local application easily is being done.
Instead of running the programs on the server, the entire environment is run in the client
This is where you can learn how to create a customised chroot environment for use in LTSP. This 'fat' chroot will then allow for cpu usage and ram usage to happen on the terminal itself, instead of on the server.
the fat client script that allows a workstation to become a net booted multimedia station with centralised management from a LTSP (Linux Terminal Server Project) server. All CPU and RAM run on the client
Ubuntu & Linux Terminal Server Project Docu
allows you to boot thin clients from an LTSP server