First time user - can't set up icloud

I am SOOOO frustrated with Apple and my IPhone 4gs.  It is my first Apple product I've ever used or owned.  Otherwise I'm just a regular PC person, who's used Yahoo e-mail for years and used to use a Palm Pilot.
I wanted the IPhone so I could sync/use my calendar, and addressbook/contacts from both my laptop and my iphone.  That way they are backed up if I lose the phone or accidentally delete something. 
1.  I can't figure out how to set up an @me.com account - I go there and it asks for the account name I'm supposed to already have.
2.  I'm just figuring out that icloud only works with Office Outlook - which I HATE - it stores data locally which means you can't access it other places.  That's why I use Internet based mail like Yahoo.
3.  When Instructions say sync with "AddressBook" - do they mean Outlook's AddressBook? 
3.  If I set up a new e-mail account for me.com, does that mean I can't use my yahoo account and have to change my e-mail addresses everyplace? 
Right now Apple is SO FRUSTRATING!  I've owned my phone for four months, still can't use Icloud.  I've even attended classes at the Apple store, but these people only understand how the Mac World operates, not how to communicate outside to non-Apple products. Apple products only seem to work if you're used to Apple products.  Right now I don't know why everyone loves them.

I have the same problem, my iPhone and iPad connect the iCloud via my gmail account but my wife's account just refuses to verify on either of her devices.
Is this Monile Me all over again???

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