iCloud is a cloud storage facility able to link to Macs and iOS devices. It replaces Mobile Me. And offers a superb set of services, mostly free!!!
Music - Purchases on iOS devices or Mac are stored in the cloud and pushed to other devices automatically. Past purchases (music and TV Shows today) can be downloaded to any Mac or iOS device. All tracks are in 256Kbps AAC format. For $25/year, CDs and other tracks can be matched, and converted to AAC for pushing to other devices.
Photos - Every photo taken on an iOS devices is put in the cloud Photo Stream. Max 1000 photos are kept for max 30days. Photo stream is pushed to all other Mac (iPhoto, permanent storage) and iOS (temporary storage) devices, including Apple TV.
Apps - Apps purchased on any iOS device are pushed to others
Docs - Pages, Numbers, Keynote documents are pushed to the cloud and to other Macs and iOS devices. They are also viewable on the iWork web site. Max 5GB storage for this is free.
Books - Purchases on iOS devices or Mac are stored in the cloud and pushed to other devices automatically.
Contacts and calendar - Pushed to all Macs and iOS devices
Mail - Inbox and Sent pushed to all devices, filing on Mac
Find my Phone/Mac - service available on web and iOS devices
Backup - Auto WiFi backup of music, Apps & app data, Books, Camera Roll & Photo Stream, iOS device Settings
Sync to iTunes - Auto WiFi sync when iOS device put on charge
Over the air - Over the air (3G & WiFi) app updates
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