"The Cloud" essentially means "the internet", but perhaps in a vaguer sense so that we're not talking about a particular web site etc, but just some resource out there somewhere. With ubiquitous always-on internet access it's now possible to do tasks that you would previously have done using your computer (like word processing) on someone else's computer and your machine is now just a graphics terminal taking your input, transmitting it to the computer doing the work and then displaying the results. You don't really care where it happens, or where your data is stored (well, you should, but that's a different story), hence the woolly term "cloud". Y! Answers is a cloud computing application, though quite a specialized one, but with applications to do general word processing like Google Docs we've can move the work somewhere on the internet and have it available form anywhere. Large amounts of data storage "somewhere out there" are now also available from e.g. Amazon, and their storage might be used by an application that has nothing to do with Amazon, so if you're using a cloud app, you may not realize you're data is somewhere else entirely.
Old timers like me have seen it all before in a different guise. It's called "the wheel of reincarnation". You have a big computer and attach terminals to it. The terminals are gradually made more and more powerful and do more of the stuff themselves until people have the bright idea of putting dumb terminals attached to the former terminal which has now evolved into a fully fledged computer than many people can use simultaneously. Cloud computing on the internet is like one of these big computers and your PC like the "dumb" terminal. But with new browsers and HTML5 and the rest more and more of the work is ending up back on your computer already (even though the program it is running is turning up on your computer on demand), and so your dumb terminal (Internet Explorer or Firefox etc) becomes an operating system or hosts and operating system all of its own and runs more and more complex programs, until...
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