If I enable the Automacically upload to SkyDrive setting in the pictures+camera settings, what level of privacy to those images get? Who can see them?
They will have the privacy setting of the SkyDrive folder where they are stored there.
Windows Phone creates a folder called "SkyDrive camera roll" where automaticaly uploaded photos go.
Depends the language you choose this folder can has another name.
By default the folder is not shared and SkyDrive will warn you if you attempt to share it.
Even if the "Auto upload to SkyDrive" is on there is an option to select the privacy setting of uploaded pictures. (I recommend "ME" since you can always change it on a per picture basis later. This will help you avoid embarrassing releases of private or sensitive pictures.)