If they don't happen to have some condition which makes them hard to use for your situation, I would recommend http://www.mediafire.com. I've not used them as an uploader myself, but to me they seem to have the cleanest, most modern interface and no annoying timers for downloading and so on. That should be encouraged.
Isn't that replacing one dubious service with another though? Right now, I'd imagine that something akin to Amazon S3 is the only reliable solution, and even then I bet they have their fair share of infringing material stored.
It's quite the rabbit hole the FBI have gone down with this action.
They don't have the shady history that Megaupload did, and appear to actually comply with DMCA-requests. That will hopefully keep them safe for a while. If it doesn't, hosting files for "everyone" is a doomed business.
Megaupload complied extremely quickly with DCMA requests by all reports. The non-compliance cited in the indictment appears to be somewhat of a technicality - at worst, only removing links instead of the file. Are you sure Mediafire complies more zealously than Megaupload did?
I don't understand why you view removing the links and not the content as a technicality and not the crux of the issue. If you're ordered to remove content from your servers and do not do so, it's unsurprising that you aren't really complying with the DMCA.
Removing links isn't the same as removing content.
Re-reading the DMCA yesterday was the first time I realized that it actually does require a service like Dropbox to remove every user's copy of a file upon receiving a notice of infringement even if only one of those copies is not allowed and the rest are entirely legal.
Mediafire also don't give incentives for people to put popular files on their system as far as I can tell.
With most services like MegaUpload/Rapidshare you get paid when people download your files, hence their popularity, its a business for a lot of uploaders.
While I agree that you should encourage proper business, I don't think that Mediafire is a good solution for the mentioned purpose. They take $9/month for 4 GB storage, and $49/month for 10 GB storage. That's really expensive!
For $10/month you can easily get a VServer with 20 GB disk space or more. For $50/month you can rent a Dedicated Server with 2000 GB hard disks. (... assuming that someone who works with embedded linux images has no problem with installing a tiny webserver and making regular security upgrades)
I do have my own $50 Dedicated server that serves the web portion but if I have to serve the large files as well, I overrun my bandwidth allocation. File-locker services seemed like an easy solution.
