The free account only gives you 2GB of storage, and you get some more for free by doing other things (like recommending friends, or setting up on multiple devices). I've now got 2.5GB of storage.
From what I can see, it's not a proper cloud solution, as on mobile devices, it just uploads things which you tell it to. So for example, on the HTC, it will automatically upload any new photos or videos, but the original will still remain on the device. On the laptop, it's more a cloud solution, as it maps a virtual folder to the My Documents folder, where you can drag and drop, or load files straight from there.