You'll probably be facing the same policies on copyrighted materials, which may result in your account getting suspended if you are hosting any illegal content. If you can actively monitor your file uploads you should be fine. Can't really comment on S3 speed, I think it's ok but the speed isn't so consistent.
Months ago I did some tests using Amazon S3. I began the tests expecting to replace some of my servers with a fast and reliable service and finished the tests frustrated. Latency was very bad, donwload speeds not that good, and uploads faulty. Searching the Internet I found other users complaining about the same issues and this old story:
Can you quantify that statement with a rational argument?
You will faster than you can say "How much wood would a woodchuck chuck if a woodchuck could chuck wood?"
This is because of their policy that you would get billed for every request. So if ppl decide to host lots of small files you are plainly screwed.
The rationale most companies are using for replacing their hardware and bandwidth solutions by using Amazon S3 basically comes down to not having to invest in hundreds of commodity servers, high-end storage (most companies using S3 were using SANS or Apple X-Raid's), labor, networking, software development to manage seamless scaling of storage, but not so much the bandwidth.
For the image or filehosting sites where a basic approach has been taken with PHP scripting and with cheap rackmounts setup without any redundancy and just local drives you're not going to see a cost advantage.
One idea I have been toying with is using Amazon S3 or one of the similar service is offloading low traffic media to it to maximize the use of existing equipment and storage.
But as a filehost application the major issue I see with using the S3 for storage, if you're pointing directly to the media via your website using a redirected CNAME record, you're losing control of blocking abuse/hotlinking, and with those files being on a metered service it could quickly cost you a lot of $$$ should they get linked on other high traffic sites.
From what I've heard transfers were pretty slow, like 20-50kb/s.