http://social.technet.microsoft.com/Forums/office/en-US/0e84...
NB woe provided a correction to this - I (perhaps understandably) confused this feature with SkyDrive for Office, which appears to be something different...
[NB woe's comment is dead, for no obvious reason]
In the case of being outside the US, it has been stated that the warrant is not necessary, and any communications or data between US and non US citizens is also fair game.
There is also speculation that the NSA is legally allowed access to any data transfers going through peering points out of the US, and that internal US traffic can be diverted specifically to allow this to occur.
SkyDrive in particular is very likely to be sharing this information as any link placed into a document in SkyDrive is visited by Microsoft, and any pornography or other 'invalid' content is deleted from SkyDrive. This implies Microsoft must keep records of all files you store there and the likely content of those files, and that 'metadata' appears to be freely available for law enforcement in the USA through the PRISM and similar programs.
EDIT: In addition, it is believed that the NSA pays Microsoft for access to Skype communications, and one would assume that they would also pay for access to SkyDrive data.
But no matter what, this is f*cked beyond recognition
Thanks for the concrete feedback. I was wondering for a sec if this was just blatant fear-mongering and imagination stretching.