I love the clean design. Focus on the functionality, branding below, concise explanations of what's what.
Thumbs up! :-)
You may want to explain the files aren't uploaded to server -- that they never leave the computer (security); you may also warn upon exceeding 32KB size (IE8 limit).
If you put data (usually little icons) in a data: URI, the browser can load the image without having to make another request to the server for the image, because the data is right there in the URL. It doesn't have to touch the network or disk.
If you put that in an <image src=data://...> tag, it would be rendered inline just like a normal image. So that's the main advantage: the data is in the URI. It's usually used to reduce the number of requests made to the server for icon images.
Thumbs up! :-)
You may want to explain the files aren't uploaded to server -- that they never leave the computer (security); you may also warn upon exceeding 32KB size (IE8 limit).