It all depends on if those functions all work together. What's been stated is that:
1) ALL games will require an install 2) No information will be read from the disc after install (this is the big one) 3) The system will always need to be online
If point 2 is REALLY true, then it would appear that used games are out. Think about it; if you don't need the disc after you install the game, then you could just give the disc to anyone else and let them install/play it.
You could have required installs and always online functionality and still have the ability to play used games. But if you really don't need the disc at all after you install the game, then clearly there is some sort of DRM put in place to prevent the same disc from being installed in another Xbox.
Many PS3 games have mandatory installs, but also still need the disc in the drive for the game to run. If you don't need the disc after the initial install for a game, then there's something in place preventing that disc from being used somewhere else. Sounds like a CD key system to me.
I won't 100% believe any of it until MS announces it themselves, and they would be verystupid to go at something like that alone. But big corporations tend to do a lot of stupid stuff.