The files are passed on to the other free services. For files that are just to single or small groups of friends I eat it on bandwidth. Example: 9 mirrors x 100MB file = 900MB of bandwidth the server just did just to send off the file, not to mention the 100MB it had to do to receive the file to. So if that file is only shared a few times the advertising dollars could have a hard time covering bandwidth dollars... maybe.
The real potential is when those same 100MB files are shared to 1000s or even 10s of 1000s of people. My website did no more bandwidth than the initial upload, but as long as people share the page that has all the mirrors on, it's showing the ads which help support the service and pay for that initial bandwidth usage.
The uploaded files are removed within a few days of MirroraFile so we don't host, or need a whole lot of space for the site.
EDIT: After reading the above it didn't sound right. What I mean is that the discarded files are removed, but peoples mirror link pages and the links to the mirrors stay. Not that the mirrors are deleted within a few days. If the mirrors are continuously downloaded they should stay up at the mirrored sites easily. Each file sharing site has their own policy so some mirrors may disappear after 30 days of no downloads, others may stay for a solid 6 months. All of which will be displayed on the MirroraFile link page if the mirror is still active.
I'm really liking a lot of the ajax stuff going on in the site where it doesn't need to refresh the page to update itself or show you new content. With the proper promoting the site should become a good size. We are getting more serious about advertising these days as G4W begins to surpass the top 18,000th website mark on Alexa. Sounds bad, but considering the size of the net, it's not too shabby. Should improve as upcoming ads start showing in flash games that display our G4W ads on other sites.
More sites are already under development. The cutting the games from 20 a day back to 10 a day should see some awesome growth as far as new websites being added to CTEN. I'm hoping some will become as popular or even more so than G4W.
Here we go.