As a dropbog alternative, I use Live Mesh from MSFT - 5GB storage and possibility to sync more folders.
Regarding the Google offer: It seems to me that the storage can be (currently) used only for photos (picasaweb) and gmail. It doesn't look bad, but I would still prefer to pay price for bandwidth per year. If I have to use this as a backup for all my photos in original res., 20GB is not enough, so the Flickr's unlimited storage for $25 still looks better.
For me, the OK price would be $5-$10 per 20GB upload bandwidth/year.
I'm using SpiderOak which gives you 2GB free, but you can get an additional 1GB for each free referral, for a total of up to 5GB free. You get a 'zero-knowledge knowledge environment' (everything's encrypted on the client-side before upload, and they can't even see the file names or other meta-data). You can use an unlimited number of devices, sync folders between machines, no special 'dropbox' folder is required, share folders with others, and use their web interface (though I'm not sure what the implications of using that are on the 'zero-knowledge environment'...I don't know how they've designed that).
This illustrates one risk for companies built on the idea of outsourcing infrastructure to Amazon AWS (Smugmug, Dropbox etc). You better add much more value on top of AWS, otherwise a Google/Microsoft can undercut you big-time on price.
My perception is that they haven't dropped prices enough although hardware has become much better (1 GHz equivalent machine as baseline?, I built a quad-core machine for $600 and got a 1TB drive for less than $100).
Google's move definitely validates my hunch.
I was thinking about getting a Smugmug account, but now I will probably use a Google account.
