It's not free, but it seems like pretty good value. Any data format can be stored and is paid for on a use-basis. No limits of the amount of data. Individual S3 objects can range in size from 1 byte to 5 gigabytes.
From the S3 FAQ:
"Until now, a sophisticated and scalable data storage infrastructure like Amazon's has been beyond the reach of small developers. Amazon S3 enables any developer to leverage Amazon's own benefits of massive scale with no up-front investment or performance compromises. Developers are now free to innovate knowing that no matter how successful their businesses become, it will be inexpensive and simple to ensure their data is quickly accessible, always available, and secure."
Right off the bat there are REST and SOAP web services to hook into. Here's the Library for REST API in C# and here it is for SOAP in C#. Of course, the API libraries are available in Ruby, Perl, Python and other flavours too...
No word yet from Amazon's web services evangelist Jeff Barr. I suspect he'll have something to say on the morning...
All looking pretty cool. Congrats to Jeff and team!