I don’t care if this is a preview or what not. Something this unusable should not be shipped.
This video shows a textbook example of poor design. Let’s postulate that the reason he can’t sign into Skydrive is that there is a server issue; that’s an issue that all cloud-based storage solutions have to deal with.
Graceful fallbacks are what is needed. There should be a way to save locally and have it upload to Skydrive when it works. There should at least be a way to X out of this menu and choose a different save option.
Errors do happen and graceful error handling is so important.