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My wife and I each have separate iTunes accounts but each of our computers are authorized to use each others iTunes music library songs and iBooks - both those purchased on iTunes and ripped from cd's.
1. Will we still be able to do this once the cloud is used instead of iTunes on our computer?
2. Can I still use my ripped songs without having to pay $25 a year?
Not sure about the first question, but I would hope so. Second question is yes but you wouldn't be able to upload them into the cloud, you would still have to sync via the library not via the cloud. This is one of the reasons I doubt I will pay for iTunes match, I can't see any advantage to it for me.
This is what is officially known to date. Everything else is rumor.
Apple - MobileMe - MobileMe transition and iCloud
I had seen that but nothing there answers my question.
-- Another question. The write-ups talk a lot about purchases being sent automatically to all my IDevices. I don's want all my content on all my devices. I presume I can adjust that. I couldn't fit all my music on my iPhone, for example.
You can turn on auto syncing for new Apps, Books, and Music. It only syncs newly purchased content, and you can turn it on/off on each device's store settings, and in iTunes preferences.
Getting older purchased content on a device is done with the Purchased icon in each store (iTunes, App Store, and iBook). Some (most) of these feature is only available in beta and the U.S. at the moment. You need an iOS 4.3.3 device and iTunes 10.3.
As for your first part of your question, we can't answer it because there has been no clear answer so far. I'd say it's an even bet at this point. iCloud is going to be pickier about authorizing devices. On the other hand it does not look like the old sync with your computer method is going away.
The second part is that, yes, you will probably still be able to sync ripped songs without purchasing the Match program. You will just have to keep syncing them from the computer. I don't remember where I read this, but it was better than a rumor while not being answered by Apple directly. I think it was someone who was using the iOS 5 beta.