One of the major new features in OS X Mountain Lion is greater integration with iCloud, with one of the additions being new Documents in the Cloud functionality. As noted by John Gruber, the feature expands significantly on the existing feature that allows limited syncing and transfer of iWork documents across their iOS devices and Macs.
iCloud document storage, and the biggest change to Open and Save dialog boxes in the 28-year history of the Mac. Mac App Store apps effectively have two modes for opening/saving documents: iCloud or the traditional local hierarchical file system. The traditional way is mostly unchanged from Lion (and, really, from all previous versions of Mac OS X). The iCloud way is visually distinctive: it looks like the iPad springboard — linen background, iOS-style one-level-only drag-one-on-top-of-another-to-create-one “folders”. It’s not a replacement of traditional Mac file management and organization. It’s a radically simplified alternative.
Apple is of course already extending this functionality beyond iWork in OS X Mountain Lion, with the iCloud file storage showing up in other apps such as TextEdit. Apple is also releasing APIs to allow third-party apps to take advantage of the feature.
iCloud Document within a folder in TextEdit
The functionality is naturally being compared to that of Dropbox, which allows users to save files directly to their Dropbox accounts for access anywhere, but Apple's new iCloud solution offers the advantage of displaying only those files intended for use with the app being used, helping to filter the list of documents and offering iOS-like folder organization of files.
