This is just information thread and possible issues with X360 Cloud Storage.
512MB of Storage Storage online and auto sync game saves with local copy*.
Less known spec:
*Where the local copy is actually stored (hint: not the in Storage where you normally see), multiple Gamertags on the same console using Cloud Storage, same Gamertag storing out of sync game saves on multiple consoles, console with no hard drive, what happens to the game saves stored in Cloud Storage after Gold Live expired, and different type of "copy protected" game saves stored in Cloud Storage.
1. *Where the local copy is actually stored (hint: not the in Storage where you normally see):
After you enabled Cloud Storage on Gamertag account with Gold Live, it creates a hidden 512MB file to sync the game saves located on Cloud Storage online. (To me, the word "cloud storage" doesn't mean much unless I know how the online copy syncs with local copy). When you start a game and picked the save game location, even you picked Cloud Storage, it actually saves to the hidden 512MB file locally. That is the reason if Live or internet connection goes down while you are playing a game, you don't get the error, Cloud Storage has disappeared. After you have quit the game, that's when it syncs the local copy of game saves to the online Cloud Storage. You can catch that if you press Guide button and go to Active downloads. Usually it syncs up very quickly but sometimes it gets stuck in the pending state for a few minutes before it syncing up.
* = if you have a hard drive on your X360, you don't need to read this. But if you don't have a hard drive on X360 and presume models with no/small internal flash storage, you want to know this. I tested on Jasper Arcade model that only has 256MB of internal flash storage. I cannot enable Cloud Storage because it will get error not having free 514MB of free space to create the hidden 512MB file. I have not tested with newer Arcade that has 4GB of internal flash storage or models with no internal storage. This is one important hardware requirement that Microsoft isn't telling you. All Microsoft advertises is upgrade to Gold Live for Cloud Storage. Not entirely true.
Addition: Cloud Storage still can't be enabled if there is only USB drives formatted to X360 Storage. I assume Cloud Storage only checks for hard drive or internal flash memory that has more than 514MB free. Is it a bug or by design?
2. What happens to the game saves stored in Cloud Storage after Gold Live expired:
I have only subscribed to the $1/month Gold Live deals lately. Once the Gold Live expires, "all" your "Cloud Storage" game saves are still accessible. I use "all" because you are really accessing the game saves stored in the hidden 512MB file locally on the hard drive. So, if you remove the X360 hard drive, all the game saves in "Cloud Storage" will disappear. If you have synced your game games in Cloud Storage on multiple consoles before Gold Live expires, you can still move (not copy) the game saves in "Cloud Storage" to any other storage. All it does is erase the copy of game saves in the 512MB file. Better than nothing because PS3 Cloud Storage will not allow you do retrieve any game saves in Cloud Storage once PS+ expires.
3. Multiple Gamertags on the same console using Cloud Storage:
I only have Gold Live access one Gamertag account at a time but I found something interesting. I'll called 1st Gamertag account GT1 and 2nd Gamertag account GT2. On GT1, when I have Gold Live, I stored several game saves on the Cloud Storage for different games. After GT1 Gold Live expired, I left some game saves in the Storage Storage mostly to test what will happen to them. I already answered that in #2 above. Then, I subscribe to Gold Live on GT2. After I enabled the Cloud Storage on the same console that I had Gold Live for GT1, I found the free space in the Cloud Storage is less than 512MB. The free space for GT2 is subtract what GT1 already used in Cloud Storage. GT1 has game save in Cloud Storage for "Game A". When GT2 copies a game save for "Game A" to the Cloud Storage, it overridden the GT1 game save for "Game A" even both game saves have different Gamertag creator. That's not nice. Explaination is both Gamertags are sharing the same hidden 512MB file which is the reason GT2 started off with less free space in Cloud Storage.
What I cannot answer at this time is having two or more Gold Live accounts. If all the Gamertags are sharing the same hidden 512MB file, file clashes will occur and how it handles them. And since every Gold Live Gamertags are sharing the same hidden 512MB file or how Cloud Storage handles them if each Gamertag uses up to 512MB of Cloud Storage.
4. Same Gamertag storing out of sync game saves on multiple consoles:
If you have read #1-3 above, you have probably know how this works. What happens if you play the same game on multiple consoles at different time, use Cloud Storage and USB flash storage transfer your game saves? Normally, you would say don't do it. But X360 storage system allows you. That means someone will do it. Whenever Cloud Storage is syncing with the local copy, it determines which game saves has the latest date/time. But if you try hard enough, you can cause the game save copy on Cloud Storage and every console copy to become out of sync. Cloud Storage works by prompting you which version of the game saves you want to keep.
5. There are several types of "copy protected" game saves. The oldest and nastiest type is when the game prompts where to save the game, the game save file is permanently locked to that storage. You are not allowed to move or do anything to change the storage. A few games I'm aware that use this type of "copy protection", ie. Dead of Alive 4, DOA Xtreme 2 and Street Fighter 4. Another type is the game save file is only allowed to be moved to another storage, ie. only one copy game save is allowed. A lot of games use this. Another newer type is the game splits the game saves file into two files (not two copies). The copy you can see in the Storage "often" stores only your game progress. The hidden game save file stores like collectable objects. I have played a few games using this type of "copy protection" but each game stores different stuff in the hidden file. I found a way to force such type of "copy protection" by removing the hard drive and force the game to save to the traditional X360 memory card that doesn't have a place to store the hidden save file. But USB storage formatted for X360 behaves like hard drive where hidden save file is stored in the reserved 512MB.
With Cloud Storage, "all" or most "copy protected" game saves is converted into "exist on one storage only" or only allow to be moved. If I'm only allowed to have one copy of my game saves, then what is Cloud Storage syncing against? This is actually the reason I started investigating what Cloud Storage is secretly doing. I don't trust to blindly use any type of storage technology unless I know what it's doing.
By combinating #1, #4 and #5, I found a way to duplicate multiple copies of "copy protected" game saves that only allow to "exist on one storage". I have other methods of clone those type of "copy protection" saves for years but if I have Cloud Storage, why not? As I explained, when you "moved" a game save from Cloud Storage to a local storage in Storages, all it does is erase the game save copy from online and the hidden 512MB file after it fully synced up. The trick is unplug your X360 from the internet where it can only access the hidden 512MB file for your offline Cloud Storage. You also need two consoles with same Gamertag. This is how you clone your "copy protected" game save file that only allowed "to exist on one storage":
(1) With two consoles, make sure both consoles have synced Cloud Storage. (2) Unplug console A from internet and move the game save from offline Cloud Storage to another Storage device.
(3) Reconnect to internet and login. Cloud Storage will resync and deletes the online copy of the game save.
(4) Boot up and login and sync the Cloud Storage with the console B. Technically, console B is out of sync with Cloud Storage. But the way Microsoft designed Cloud Storage, console B will copy the game saves back to Cloud Storage online again. I would say I haven't tested this with a lot of games if the trick always works but it worked for me.
I presume the Cloud Storage doesn't have a record when the game save files existed once deleted from online Cloud Storage and later always assumes on another console that still has the old save game files in the the hidden 512MB file is the latest and syncs copies it back to the online Cloud Storage if missing. Can be messy if console A user is cleaning up the Cloud Storage and when the user logins to console B with the same Gamertag will put all the deleted game saves back to the Cloud Storage. To the advantage of cloning "copy protected" game saves, this becomes a feature.
As for "copy protection" that splits the game save into two files as I described above, I don't have those games anymore. So, I can't answer if you move those "dual-files" game save to Cloud Storage, both files get moved or not.
I'll update this thread with more tips and tricks of Cloud Storage if I discover more.
X360 Cloud Storage is probably the simplest type because it's a single user at a time to access the same file and 1st saves your data to a local hidden file, it doesn't have to deal with many advanced online/cloud storage complexities. Maybe some day when Microsoft allows multiple logins on different consoles with same Gamertag, then it has to deal with same Gamertag users opening the same file stored online/cloud storage directly and multiple users writing to the same game saves, then it will get interesting. Hint: Microsoft Office allows multiple users accessing the same file stored online storage at the same time. Certain database allows multiple users reading and writing to the same file at the same time.