Quote from Chezzik
There is just one downside, as I see it, but unfortunately it is HUGE. You can't install mods. You can only play on vanilla (officially released) servers. They claim to be working on adding bukkit support, so I assume that will include mods. Until that time, this is really nothing more than a toy, in my opinion. You just cannot host an open server without worldprotect or logging mods, etc.
Hey there! I'm Minefold's community manager, and I wanted to chime in here on a few of the issues you have.
1. Mods are almost an essential part of the Minecraft experience. They're also extremely resource intensive if you don't manage them correctly. At Minefold, our first concern is making sure the playing experience is the best you've ever had, that means ensuring that plugins don't lag your server to death. We are working on making some of the most popular plugins available as soon as we can, and there will be more to follow.
2. We've just recently pushed a new update that removes 'pluto.minefold.com', now you can find your world by connecting to <worldname>.<ownername>.minefold.com. For example, to play on my 'Wedville' world, you'd connect to wedville.wedtm.minefold.com. We also don't require you to sign up on the Minefold site before playing!
2. When hosting a server normally, you have two options. Whitelist, or free-for-all. Sure you can have some plugins that restrict building or jail new players, that's fine and all, but it still prevents them from playing on your map. With Minefold, that doesn't happen. With minefold, all worlds are white-listed by default, to gain access you have to be allowed by an op of that world. You can request to play, and if denied, you can even clone your own copy of the world and play.
This aspect is important, it gets rid of most of the need for logging and world protect. Minefold isn't for massive servers that are trying to take in hundreds of donation dollars a month. Minefold is for the every-day Joe, who just wants to build with his friends.