With AT&T's network running SO slow at times, I ABSOLUTELY WILL NOT INSTALL an update which make me use the server farm for streaming my own media.
A lot of people need to calm down.
Do you really think that the cloud update is going to stop you playing media that's already on your phone? Do you think Apple's just going to drop the internal memory?
The cloud option will be just that - an option. You'll still be able to store music and video on your phone. The cloud stuff just extends the possibilities.