@Toshi

If, for example, you start with a 512MB Droplet ($5) and use it for 5 hours, then upgrade it to a 4GB Droplet ($40), you'll be billed for 5 hours on the 512MB and then for however long you use the 4GB.

If you downgrade back to a 512MB ($5) Droplet from a 4GB ($40) Droplet, you'll be billed for the 5 hours on the 512MB Droplet, X hours on the 4GB Droplet, and from then on, until the next change, you'll be billed per hour for the 512MB Droplet.

Where X is the amount of hours on the 4GB ($40) Droplet.

All Droplets are billed hourly with one-hour being the minimum amount billed. So if you use the Droplet for one-minute or 59 minutes, you're billed for the full hour.