How do I get free storage upgrade as former mobile me subscriber?

It was applied automatically, but note that it does not apply to people who had Family Pack sub-accounts, only to full MobileMe accounts (and of course you have to have migrated your MobileMe to iCloud, not started a fresh one).

It (the upgrade) was offered by Apple to Mobile Me subscribers and was "automactic" to those that used Mobile Me services.

What, exactly, are you getting?