Today, I spent a bit of time playing with S3 (simple storage service), a service run by Amazon. I only really thought about it recently after I helped someone I’m working for to make videos run from it.
The main bonus of S3 is that it’s cheap, and unlimited. You only pay per what you use – nothing more, and nothing less. I think it’s about 15 cents per gig stored, which isn’t bad at all, and the transfer prices vary. For my backups, which come to a few gigs, I’m looking at about 40p (80 cents) a month, which is peanuts really. Less than a decent bar of chocolate costs 
The main downside of S3 is that for a newbie, (like me) it’s very difficult to use – the developer site suggests a bunch of encoding and post templates and stuff, which while I understand how to use them – it’s too much effort. Things like JungleDisk cost even more money (although it’s not much) , and the idea of S3 (from what I can see) is to create cheap, fast and reliable storage.
Thankfully, there is some skilled coder person out there, who has created the following 2 items, which, while they are in beta, work almost perfectly on my pc- s3 backup and s3 webmaster. The former uploads files so they can’t be accessed through http – not public. The latter uploads files so they can be accessed publicly. Both make using S3 for file storage and webmastering much, much simper. Yay!
That means that the only thing I don’t like is that you can’t put a cap on the monthly bill. If you upload a lot, or someone downloads a lot, you’ll get a big bill. There’s no way around that, unfortunately.
As an additional note – I think Wordpress.com use S3 a bit, I saw a post about it on Ma.tt from a year ago, so they used to, but whether or not they still do I don’t know.
You can find out more about S3 here.