@Shan
(1) Size limit.
My concern is this... when Microsoft announced their plan to expose the RDB functions of SQL Server on the Azure platform we were told the DB size limit might be around 5Gb. MS explained this was because it would be difficult to handle replication/failover events for a larger database. Now 4 months later the official max size has doubled to 10Gb and folks are still campaigning for a higher limit.
Stability and consistent query performance are my top requirements for SQL Azure, but if MS gives in and raises the max DB size again could this cause my application to experience a performance wobble when a SQL Azure server crashes and the Azure fabric struggles to replicate a new copy of your 15 or 20Gb database?
(2) Protected resources.
I think you should be more aware of the potential for a bad neighbour application to affect your application. Things look promissing for VM partitioning because hypervisors have had years to mature and the CPU manufacturers have helped by adding microcode instructions to assist hypervisors. That said you should still be aware of the potential for a physical server's network connection to be swamped, this is an issue on Amazon's EC2 VM technology.
As to SQL Azure resource partitioning it is early days and I imagine that MS has had to retrofit the resource rationing into the SQL Server engine on a telescoped development schedule.
(3) Competitive cost advantage.
SQL Azure's cost per Gb of storage is not really the primary measure of value. One Gb of cloud disk storage costs only cents*, 98% of the monthly SQL Azure fee buys query compute power and data memory cache. $300 per month to host 3 x 3Gb RDBs on a highly performant platform could be excellent value, we just don't have the comparative performance data yet.
Have you costed out hosting a 20 Gb db on a clustered pair of Window SQL Servers at Amazon together with block storage and S3 storage for you backup cycle? The monthly bill goes way north of $1000.
* = Assumes that SQL Azure uses the same quality SAN storage as general Azure table/blob storage.