At the simplest level cloud storage will be a folder on your device and it will save what ever you put in it. The caveat is that it's only available to you when you have an internet connection. If you have a Google account Google Drive has 5GB cloud storage for free and you can get larger amounts of storage for a fee. $5 a month gets you 100GB.
If you already have other cloud storage accounts you can access them through the Chrome web browser.
Microsoft SkyDrive is a 7GB basic account (or 25GB if you're a long time user who got the free upgrade). 100GB for $50 a year.
There are a few other cloud storage services out there too.
With a cloud storage account you can have access to your 'stuff' from your PC/Laptop, a phone and your tablet. You can move a file from your PC to the cloud and access it from your tablet, for example.
I am considering getting Nexus 7 and find this information very helpful. The only query I have is if you upload something to cloud storage, can you use it when you dont have internet connection?