It allows you to have access to all of your music if you have a 3G or wifi connection.
I have over 200gb of music and if I'm at a mates house or working sumwhere, I can access all my music.
I'm sure it does more, but I use it for that reason.
Only downside is, on my iphone, if I don't have Internet connection, Im scuppered.(unless I've downloaded the song previously)
And I also can't find an easy way of telling what's actually downloaded on my phone, and what's on the cloud!
Hope this all makes sense! Haha!