So a few hours ahead of the site launch, these guys got a preview.

tldr: mega.co.nz will basically be a clone of various other locker services that give you some web space like Google Drive / DropBox etc.  50GB space for free users, stand out features being automatic encryption and hosted on nodes around the globe.

50GB is a fair amount of space comparitively, but nowhere near the unlimited that MegaUpload originally had.  Claimed client-side encryption of all uploads (unsure how the key distribution works, or how secure it even is) is interesting, although you could do this yourself via encrypted archives.
I suppose the 'distributed' part is basically where Mega is leasing out many servers around the place instead of focusing on data centres?

http://www.gizmodo.com.au/2013/01/heres-...coms-mega/