From what I've been reading the gist is that it won't be a total "Cloud" concept, but kind of a mixed system where your *insert-device-here* will become part of the cloud and iCloud will allow you to tunnel through the internet, similar to a NAS. It saves Apple from having to store the whole worlds worth of shit on their servers, with all the security/privacy implications that has.
From what I've been reading the *insert-device-here* is likely to be the Time Capsule router, that way you won't need to have your laptop on or attached in order to access your portion of the cloud. It also reduces the upload/download bandwidth within your own home, since the majority of the information never leaves your house. The only time it'll cost bandwidth is when you tunnel through the cloud and start pulling your own data through it to another device.
Not sure if they have any other ideas up their sleeves for those that down own a Time Capsule, or if they have any idea how to deal with the slow upload speed most of us have on our residential ISP accounts.