What is iCloud?  iCloud is a new service Apple Inc is rolling out to users of iOS 5.  It automatically streams your information from your iOS devices to the cloud, then sync's it with your Mac or PC at home.

iCloud stores your music, photos, apps, calendars, documents, and more. And wirelessly pushes them to all your devices — automatically. It’s the easiest way to manage your content. Because now you don’t have to.
Your content. On all your devices.iCloud is so much more than a hard drive in the sky. It’s the effortless way to access just about everything on all your devices. iCloud stores your content so it’s always accessible from your iPad, iPhone, iPod touch, Mac, or PC. It gives you instant access to your music, apps, latest photos, and more. And it keeps your email, contacts, and calendars up to date across all your devices. No syncing required. No management required. In fact, no anything required. iCloud does it all for you.Free gets you a lot.When you sign up for iCloud, you automatically get 5GB of free storage. And that’s plenty of room, because of the way iCloud stores your content. Your purchased music, apps, and books, as well as your Photo Stream, don’t count against your free storage. That leaves your mail, documents, Camera Roll, account information, settings, and other app data. And since those things don’t use as much space, you’ll find that 5GB goes a long way.

Link: http://www.apple.com/icloud/what-is.html