Can I erase "My Documents" after I upload 100% to Wuala cloud and expect to download 100% back?

I would NOT recommend uploading files that you would regret to loose to Wuala yet, after all it's in its Alpha stage.

What if they find a much cleverer way of organising the data in the networt and have to wipe the existing one?

However your assumption is correct - if a file is uploaded (= to the server) _and_ maintained (= to the P2P cloud) it's very likely that you can retrieve the file anytime later. I guess however Luzius, Dominik or some other Caleido-guy can explain that better...

At this stage I seem to recall that the Wuala team does indeed have a complete backup of all files on their servers.
Hence your file would be save....
I would however tend agree with Bugreport that you should not solely rely on Wuala to store your file since this is still an Alpha version and we have hence not ever reached feature-completeness. (By the definiton of apha stage)

Okay, so if I upload something to Wuala does it first get saved to my Local Cache? Assuming I tried to "download" from the same computer that uploaded the files, should I be able to retrieve all my files from the Local Cache with the requirement that my Local Cache Size is bigger than the cache size in Use? So, in effect, I have two copies of the files - one set in My Documents and an encrypted set in Local Cache. Is it safe then to erase "My Documents" since I have the files in Local Cache?

I think so. You only loose the files if you clean the cache.

Although there have been some cache related problems (http://getsatisfaction.com/wuala/topi...). For example, my 'Clear Cache' button doesn't work to well as I said on that topic...