Sorry for the late reply, haven't been on recently.
To answer your question, Ambassadors act as, what you may call, tech support and customer service reps. We receive questions from Xbox users, ranging from simple things like a system giving an error message or helping someone troubleshoot connection issues, or even issues with games not playing properly.
The one restriction we have, and for good measure, is we don't have access to user records. You can imagine the chassis that may occur if we did.
While we are technically unpaid, MS rewards dedicated Ambassadors with things like free games, Xbox LIVE Gold, avatar rewards and you can even win other various prizes depending on what's happening (I know a few who were given Xbox One's when they launched).