The world of file storage is confusing...
Infolab home directory
This one is mounted over the network (NFS) from one of the ilhome machines. It may be slow and it may not have a lot of free space, but your data is daily replicated over 1 or two more machines just in case something fails. This is a good place to store your important files, but be careful as you may run out of space.
CS home directory
Also mounted over the network (AFS). All our home directories are on the new il-fs-1 server. The space is not unlimited, but there is plenty of it for now. Quotas are imposed, but don't worry. If you run out of space, just send a friendly email to action@cs or to akrevl@cs and we'll set you up with more space.
The data from your CS home directories is backed up to tape daily.
This would be the best place to keep your important research results, your code and other important data. Keep in mind that even though there is plenty of space, you might get an evil eye for storing your personal 2TB movie collection here.
Whatever is mounted under /lfs represents one or more local hard disks. This is the fastest storage that you can get on a given server. Bear in mind that this is not backed up. Treat it as a local scratch space.
/lfs file systems are useful for keeping local copies of datasets you are currently working and for the temporary results and other by products of your analyses.
Filesystems mounted under /dfs are network filesystems. They are useful if you want to copy data from one server to the other, but they will slow down your programs as all the data needs to be read over the network. So unless your programs run on multiple servers and require access to the same data, you are better of with using /lfs.
Some servers also have /sfs mount. This is a very fast storage but not fault tolerant! This mounts can be used only for staging of your experiments.