How does the available space get used and how can you free it up?

We want a form so people can upload 1-2mb files. Does each submission subtract from our "available space"?

The available space has to do with uploaded files through your forms, this means that if you make a form with out upload fields, it won't take the available amount (Upload Space). You can free this up by deleted the entire submission. We recommend to download the report first and then delete the submission.

Here is a general guide:

http://www.jotform.com/help/44-How-to-Export-Form-Data-to-Excel