iCloud and music...

TBH, I am not sure how it works. However, I suspect that they store the titles of the music you have purchased on iTunes rather than the files themselves. As for music ripped from a CD, I think you get charged for the privilege via iTunes Match service.

In any case, I never get rid of iTunes receipts, and I backup my iTunes library locally as well as on iCloud.

I agree with the previous post. Anybody?

First of all, buy an external HDD, you can get 1TB ones cheap these days. Then, back up your itunes library-do it regularly. Then you can back up with iclouds too.

Your music is NOT backed up to your iCloud backup. If you pay for iTunes Match (not available yet), then any songs Apple matches in your library with theirs, they just note that you have that song and can redownload it. Anything they don't have will be uploaded to their servers. You can access those songs as long as you pay for iTunes Match ($25 per year).

The backup in the iCloud only stores things like your settings, photos, app data, which apps you have, text messages, etc. This is the same as when you backed up your iPhone to iTunes, you still had to sync music separately.

iCloud backup is exactly the same as the backups that used to be done via iTunes whenever you synced. It is a backup of app data, settings, contacts, etc - it is just saved to your iCloud storage instead of your computer like it used to be. You will still need to keep the data side of things (music and apps) in your iTunes library on your computer.