iCloud is an umbrella term. It makes no sense to compare iCloud to Dropbox. Dropbox doesn't provide app syncing (calendar, contacts, mail, alarms, etc.), it doesn't provide photo syncing, nor Music Match, or anything else iCloud provides and conversely iCloud doesn't provide a portable file system like Dropbox does. At some point iCloud could bundle Dropbox -like services under the iCloud name, but at this point it doesn't.

I use photo stream all the time, rely on contact and calendar syncing, use share music between all my devices AND use dropbox daily. Not once have I had to decide if I should use dropbox for this or iCloud. They simply don't step on each others toes.