Reply to iCloud, Dropbox, Something Else?

I am new to the Apple family, except for my iphone, and just picked up an iPad 2 yesterday.

I love it so far and would like to have my school documents, work documents and music be available on it.

I am researching iCloud, but it seems that all the files are "downloaded" onto the ipad wirelessly...correct?

On the other hand, there is dropbox, where the file stay on my computer, but never "download" onto the ipad, but are still available via their app.

I would like something similar to dropbox, or am I completely incorrect about iCloud? I do not like the idea of having everything downloaded. I just want the files available that are kept on my PC, to be available on the ipad but without using up my space...no downloading...

Am I crazy? Is this basically what dropbox does? Is there something else available that offers more space?