"The Cloud" is a marketing buzzword that simply refers to the migrqation of software, content, and users from a single location pc to internet servers.
You are using "The Cloud" right now. Rather than storing your John Dee comments on your pc, you upload them to an internet server where we can all share them.
Now, think about your music collection. It's on your pc, that's the only place you can listen to it. So, you buy an mp3 player or download to your phone, then take it with you. Wouldn't it make more sense to upload all your music to a server, then access it with any internet device? All you would need is the device and the high speed connection. You can try this now at Amazon, where they are giving 5gb of music storage for free.
Think about documents. Why do I want the software (MS Office) loaded on my pc, (which I have to pay for) and why do I want to store those documents on my pc? Try Google Docs. Everything is on the Google servers, so I can access my docs from anywhere. Also, docs can be shared. Think about a presentation for a client. Someone could be building the pres while I am in the air to the client, I can review and revise at the hotel. Yeah, you can do this with e-mail, but that creates multiple copies and confusion.
Remember when e-mail was on your pc with Outlook? Not no more, man! Gmail, yahoo mail, etc. are all "cloud", you can access your e-mail anywhere if you have an internet connection and an appliance.
With the strong growth of high speed service in the US, this cloud thing becomes highly marketable, because consumers will buy new appliances to access it. Tablets, smart phones, etc. will, and are, replacing pcs.
You do not need a kick azzed pc to do it. You need an appliance (smartphone, tablet, pc) and access to high speed. As for the software question, the license is granted when you agree to the terms of service.
This is a major paradigm shift for consumers. After After 3 decades of buying pcs and software (and maintaining them) we are now going to let someone else do that for us. A tablet, a connection and a Google account replaces all the pcs, mp3s, software, hard drives and other bs for the majority of non-business consumers.