From Andrys Basten’s blog. More details at the site:
I should clarify since few know it, that every Amazon customer gets 5 free gigs of storage space for ANY data from anywhere (unless it’s copy-protected by others) — and any music you upload from your own stash is streamable for you from anywhere, at anytime, at no added cost. Any mp3’s you buy from Amazon are not counted against the 5 free gigs. Just as with Kindle books, they’re just automatically stored.
All Kindle owners (globally) now get 5 additional gigs of storage for “personal documents” — meaning doc, text, PDF, or non-Amazon books (with no digital-rights-management protecting them) received from other sites and this includes your own notes, which if sent via e-mail to your Kindle by you will be automatically stored for you and will be sync’able between all your devices just as Kindle books are, so that you can read them on your other devices, from where you last left off.
Any notes you make for your personal docs sent by you to your Kindle will also be stored for you (with your consent by sending them to your Kindle) and annotations will be kept retrievable by you with the document. 5 gigs is quite a lot for this type of material.
You also need to remember that the US government will also have access to this data since Amazon is based in the US. This is why the EU has warned EU companies about using US based cloud servers.