We recently had a PH on the Regatta, (I did post a review on this) and thus had a Butler. Yes you will pay for anything you take out of the refridge. The good news is that you can take whatever you want onboard, and what we did was tell our Butler that we were going to remove the items from the refridge, and we all agreed on a place to put them, thus if we did use, say a bottle of water, then we would know - we also kept track of whatever we used and told him every day or two, and there was no problem. We put our own stuff in the refridg and our Butler had no issues - if he had a question, he just asked us.
Yes it is "pay as you go" for anything from non alcoholic drinks to sodas to water - but if you know that going in then you can compensate by buying and bringing your own things as you go for your cabin - you cannot consume those in the public rooms, except for wine which you can bring to the dining room and they charge you a corkage fee, last I heard it was $20. per bottle - but hey if you are bringing an expensive bottle of wine onboard, then that might be ok. We actually found some reasonable priced wines and generally ordered wine each night, if we didn't finish it, they would keep it for us and it didn't matter where you were, bar or any of the restaurants, they would find and bring you your bottle of wine - so we definitely didn't leave any undrunk!!
Our Butler was great, and he set up a cocktail party for us one night with appetizers which we discussed in advance, made sure we had plenty of glasses and ice and such. He also, one night merged our 2 person "sharing" reservation in Toscana, with two other couples that we wanted to eat with, into a 6 person "only" reservation and that was not easy, as the alternative restaurants were full every single night. So, since you have a PH, you get to make two reservations in each restaurant thru your Butler, unless you want to go do them yourselves, and my advice is do it - you can always cancel, and if you are lucky you can merge with other couples that you might meet. Unless you have cabin numbers, then you can only make reservations for 2, and you will end up sharing unless you specify a table for two.
Hope that helped - we enjoyed our Oceania cruise and hope you will too. Like I said, you can read my review on the Cruise Review board.