So Microsoft is lowering the amount of storage that Skydrive gives you from 25GB to 7GB.
HOWEVER: If you opt in now, you can chose to keep your 25GB of storage by claiming a "free upgrade." I believe this is only available if you have already used your skydrive however.
With the new update that allows you to upload 2GB files to it, a free 25GB of cloud storage is a really hard thing to beat right now. Compare it to Googles request for $2.50/month for that same amount.
Take action, fellow gerbils.
EDIT: Article link: http://www.phonearena.com/news/SkyDrive ... GB_id29397