The thing about Azure is it keeps evolving and they keep trying to solve the difficult problems so we don't have to. Admittedly these are difficult problems to solve at the application level. That is also why it is hard to keep documentation up to date. It is better if they solve it at the platform level.

Just today Scott Guthrie posted about new Azure features, see especially the section about "Virtual Machines: Support for Capturing Images with both OS + Data Drives attached". That is what I've been saying to do, then it is just a matter of making an IIS Virtual directory that maps the /Data/Sites/[SiteID]/media folder to a folder in in the mounted data drive. So user files are uploaded to the attached data drive which behaves just as if it were normal file system storage and the rest of the mojoportal installation files are part of the vm image.

eventually I will get around to trying to document this process myself but it isn't my top priority and the longer I wait it will just get easier because they are still working on making it easier. In the meantime, Azure Websites is the easiest solution compared to Azure vm web roles.