According to this press release, you will no longer be able to access your cloud saves if your Playstation Plus membership expires. However, your data will remain on Sony's servers for six months, and you can access them again as long as you resubscribe within that time period.
But, if your PS3 dies six months after you backed up your saved games, you've just lost 6 months of gaming! The way I see it, if you're going to back up your saved games at all, you should go the whole way and pay for PSN+ membership.
And you should anyway, since the cloud service is the only way you can backup your copy-protected saved games.
(Apparently the backup utility can backup protected saved games, but it can only restore them to the same PS3. If that PS3 is dead, then tough.)