I'm assuming all these questions are about iTunes, yes?
Is it possible to download you whole library if your HD dies?
FAQ: Why iTunes Match can NOT be used as a backup! You should always maintain your own local backups of all your personal data. Apple provides an excellent mechanism for backing up in Time Machine. All you need is a sufficiently large external HDD. If you are not using Time Machine now to backup (or some other method to protect your personal data in case of disaster) then you need to start immediately.
Lastly what is the difference between matched and uploaded?
"Matched" means that a song in your iTunes library was matched to a song on the iTunes store and it will be availbale for download and listening on any of your devices. "Uploaded" means just what the word means. A "match" could not be found for the song in the iTunes store so it was uploaded to be available for download and listening on any of your devices.
The one thing I am a little confused about and can't seem to get an answer to on the web is what happens if you delete music from your library. Can you download it from iCloud? If it is deleted how can you tell that it needed to be download? lets say it was deleted by accident.
Don't delete things "by accident." But, yes, is a song is deleted from the iTunes library it is possible to download it from the cloud. You will see a cloud icon with a down-pointing arrow next to the track to indicate it is in the cloud.
However, as I said above, you should be maintaining local backups of your personal data in case of disaster.
Thank you very much for these answers. I already do have an extenal backup of my iTunes library which I update every so often and keep it unattached when not needed. I just wanted to clarify some of the words used by Apple. I use Carbon Clone instead of Time machine and my iTunes library is on external drive as it is too big too keep on my main HD.