I've been playing with google docs storage for about a month. The user interface is inferior to Amazon S3 + S3Fox in every way, but for 1/5th the cost I'm willing to put up with it (though it's only 1/5th the cost if I fill up all the storage for the given price tier, I think they expect most users not to use a large fraction). AVIs and JPEGs can be dragged-and-dropped in quantity, but NEF and .ini files have to use the 'select more pictures' dialog which can only handle 10-15 files at a time (otherwise a strange character appears instead of a list of all the files). Upload speeds seem good (a megabyte every 3 seconds or so), better than I remember S3 being last time I tried it.
There are some linux filesystem programs that can mount my entire google online storage (including blog posts), but only allow uploading of the google docs formats and not any file at all like can be done with the upload dialog. Hopefully this changes.
Folder upload is now possible (no more shift selecting the contents of a folder and having to cut and paste folder names), and it looks like subfolders are uploaded properly. But sometimes a file fails to upload properly, and using the file method it was possible to see which file failed and re-queue for upload. Now after I've uploaded a folder with 90 items and it took 20 minutes, there is an error message saying that one file failed to upload, but no way to know which one. Retry fails repeatedly. Some reports of same, though I haven't seen the other bugs mentioned.