Yeap, I think it uses a lot of 'Other' Storage space. Joe Belfiore mentioned it before in his tweets. He said to disable the auto upload to Skydrive.
I think the reason is when you manually/automatically upload the photos to Skydrive, you will see a new album created in the Photos, which has a "From SkyDrive" name under it. If you uploaded all the pics since the first shot, then all the photos in that albums are the duplicate of the photos that you have on Camera Roll.
So, even though, the photos inside the SkyDrive album are not stored in your phone, you still can see it as thumbnail, which means, it is using some spaces on your phone.