The greatest benefit of iCloud is keeping all your devices in sync. Add, edit or remove a contact on one device and it will automatically update on your other devices. But be aware, your master file is on icloud.com, so if you find you have duplicates, sign into iCloud and make your changes there.
For syncing photos, you must have iPhoto 9 ($14.99 in the App store) to automatically upload your Photo Stream to iCloud. To activate:
On your iOS devices, go to Settings > iCloud > Photo Stream, and turn on Photo Stream (or My Photo Stream).
On your Mac, go to System Preferences > iCloud and check the box for Photo Stream.
Photos are uploaded only when you are connected via Wi-FI, not over cell connections. Once there, they will be stored for 30 days to give all your devices time to sync. Your last 1,000 photos will be stored in Photo Stream on your devices- to keep them permanently, move them into another folder. (Click the + at the top of the window, use "edit' to add photos.) Photos sent to Photo Stream on your Mac will remain without the need to send them to other folders.
You can see which photos are in your album by choosing the Photo Stream tab- at the top of the Photos window on my iPad 1, which runs iOS 5, and at the bottom of the window on my iPhone, running iOS 6. Read more about using Photo Stream with iCloud here.
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