Cloud computing is Virtual Machines combined with Clustering.
Linux clusters of cheap commodity hardware when combined with virtual machines provide the management facilities and power needed to run applications on a massive scale.
That is it.
That's all it is.
Cheap hardware and proper management software allows organizations to run software to serve thousands of people simultaneously much cheaper then ever before possible.
When combined client side scripting to offload most of the application logic to the end user's computer and with AJAX stuff so you can relay information realtime between everybody and their browsers you can literally have the ability to serve applications out on a global scale.
This is a new thing and people are now pushing it to see how far they can take this sort of technology.