Document & Data sync allows you to wirelessly work on the same project from multiple devices. Say you started a Keynote project on your iPad; you could add a few slides, save that project, and then open it up on your iPhone to do some last-minute tweaking--no file sharing or emailing copies to yourself necessary. Currently, the only apps that work with Document & Data sync are Pages, Keynote, and Numbers (Apple's iWork suite); however, the company has released an API for any third-party developers who want to implement this in their own apps, so we'll hopefully see more compatibility in the future.
If you've owned an iOS device before, you'll find iCloud backups very similar to connected iTunes backups. Like iTunes, iCloud will back up any purchased content (music, apps, and books), your Camera Roll, device settings, data, Home screens, messages, and ringtones, but instead of saving that information in a file on your computer, the service will instead store it online. This way, if you buy a new iOS device, you can automatically copy your settings and information to it without ever needing to plug into your Mac or PC.
iCloud isn't limited to your apps, documents, and mail information, though: It'll also help keep all your recently taken images in sync. Apple's Photo Stream provides all your iOS devices, Macs, PCs, and second-generation Apple TVs with photographs you've snapped or uploaded in the last 30 days. Your iPhone, iPod touch, and iPad will only sync the last 1000 images you've taken due to space constraints (your computer, however, will store everything), though you can save a photo from the stream at any point by moving them to your library.
iTunes in the Cloud
Apple's iCloud pièce de résistance, however, may very well be iTunes in the Cloud. For free, you'll be able to access a complete record of all your purchased iTunes content; download new music, apps, and books automatically; and redownload anything for free. Pay a yearly fee, and you'll be able to access your entire music library (up to 25,000 songs) across multiple devices, whether they be purchased iTunes songs or not.
Automatic downloads and past purchases are automatically included as part of iCloud's free service. Like its name implies, the automatic downloads feature allows you to automatically download any new music, TV shows, apps, and books you've bought, regardless of the device you originally bought it on. Using past purchases, you can access older purchases from the iTunes, iBooks, or App Store apps through their Purchased menu, and redownload any of them for free. (This latter option has been available for everyone to try in beta since June.)
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