Can't setup iCloud on my mbAir :(

I followed all online instructions for setting-up an iCloud account on my 2nd gen MacBook Air.
-Software is Lion 10.7.2 up-to-date.
-I went to System Preferences and entered my Apple id, the CORRECT way, several times and it stills prompting a message under the id field saying that either the apple id or the password is wrong.
Could there be another cause for this besides entering my info incorrectly?
Because I carefully tried several times already !
I even have iCloud running in my iPhone 4.
THANKS in advance!
YB

Log In to iCloud at www.icloud.com with the same credentials to verify userid/password.  Be careful of the password, it is case sensitive.
Then try again in System Preferences > iCloud.
Captfred

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