Joining the discussion....
Now, I'm not a very big proponent of this online pattern. One of the primary reasons being that it may become out of reach for applicants from villages etc., who may find this method more expensive rather than the currently used paper method. This is because, a centre would be decided(as a Prometric centre for GRE/GMAT) and one has to appear to take the test. Also, the application fee is likely to be hiked, if it's set to go online.
Then again, such people may not be very comfortable using computers and it may take a lot of time for them to actually grasp the ways to use, answer etc. Applicants for GRE/GMAT are mostly urban people, who don't face any trouble with handling these systems. Even with urban people, being able to use these systems well enough doesn't necessarily mean that taking an online test would be smooth sailing. Like for instance, RC passages or even LR/DI caselets. They're pretty long, more often than not. With an online exam, you'll have to scroll repeatedly to read, understand, re-read etc. This is so much simpler in the paper-based method. There may be other disadvantages as well with the online exam but this is one example which struck me.
Also, no matter how much backup the exam centre has, whatever precautions it may have taken, an online exam still is risky, as anytime the net could get disconnected, load shedding or simply, the computer may start acting funny...... These things can get seriously irritating during the exam.
Another point. Although the difficulty level may be similar or may even be increased, the very idea of conducting it 3/4 times in a year would mean that the intensity level would be missing(barring the few initial times after it's launched). Competition(by way of quantity) will decrease, as number of people applying at a given instant would be far lesser than the total number of applicants. The whole idea behind CAT(or for that matter, any other top exam like XAT/SNAP/JMET etc etc) is the "All or nothing" feeling. This is one feeling which gets all the applicants tense, no matter how well he's prepared, how much experience he has(in taking these tests). Till the results are declared, you don't know where you stand and if you do falter, you know there's one full year to wait.
Although the online method would seem beneficial in this aspect that it gives quick chances to those who couldn't do well earlier, but it CANNOT replace the anxiety/pressure/fear that is associated with CAT currently(although much of it's overhyped, thanks to the media)
And if the IIMs indeed wish to follow the method GRE/GMAT do, they'll want to display one's score as soon as he finishes his exam. Now, that would mean they would have to do away with the percentile system, as the total number of applicants are not known and everyone would try to take the test as per their own convenience. And if indeed the percentile system is replaced, the very idea of "Relative Performance" goes for a toss. Like in GMAT, even if you score 780/800, you don't know your percentile. You're happy with this score, no doubt, but I don't think it gives the same feel as knowing that out of 2.4 lakhs, 99 % applicants are behind you in their rankings. This really makes you feel on top of the world. Also, relative performance is directly linked to the competition and not on the level of questions. Even if the paper is difficult, it's difficult for everyone and not just for you. Although the concept of "adaptation" is prevalent in GRE/GMAT as well(i.e. easier question if you answered wrongly and tougher one if you answered correctly), but that's just adapting to your own self. What about the competition there?
I think I've been quite critical about this online exam, but as with anything, it's bound to have its share of advantages. Just that, I'm unable to notice any now....
CAT 08: GAME ON !!! 
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