Network virtualization allows one to build dynamic distributed systems in which resources can be dynamically allocated at locations where they are most useful. In order to fully exploit the benefits of this new technology, protocols need to be devised which react efficiently to changes in the demand. This paper argues that the field of online algorithms and competitive analysis provides useful tools to deal with and reason about the uncertainty in the request dynamics, and to design algorithms with provable performance guarantees. As a case study, we describe a system (e.g., a gaming application) where network virtualization is used to support thin client applications for mobile devices to improve their Quality-of-Service (QoS). By decoupling the service from the underlying resource infrastructure, it can be migrated closer to the current client locations while taking into account migration cost. This paper identifies the major cost factors in such a system, and formalizes the cor...