How do I find out how to use cloud and what does it exactly do?

I Am new to Apple and just not sure how this iCloud works and what does it do.

Read here:
http://www.apple.com/icloud/
Basically it is a storage area on apple's servers that lets you keep a backup of your device to restore from in case you need to.
It also has additional features for your media content and other services.

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