I don't recommend upgrading to Lion. There are a lot of problems, and they are persistent. In fact, some of the problems are "features" and are unlikely to be corrected.
Having said that, if you want iCloud fully, you need to upgrade. Having said THAT, you can take advantage of many iCloud features while sticking with Snow Leopard, which is unquestionable, a more stable and better designed system.
Here's my rundown of when you do and don't need Lion for iCloud:
iCloud – Lion Not Needed
Calendars and Reminders:These can be synced automatically to iCloud by simply changing the settings in iCal to sync with the iCloud server. If you make a change to any of your calendars, all of your calendars will update almost exactly as they would with Lion. You can find instructions on the proper settings for iCal here: https://discussions.apple.com/thread/3402091?answerId=16418266022#16418266022
Find My iPhone and Find My Friends: Neither require Lion to run.
Mail: Technically, this does require Lion, but you can achieve the same effect by using an IMAP mail server (gmail does this). IMAP (as opposed to POP mail) always has been a "mail in the cloud" type service, and does exactly what iCloud does: syncs your mail on every device. Bonus: Mostly likely you can do this with your existing email account if you're not already.
Backing up your phone: I've never tested this, but I'm pretty sure you can back up your phone settings without Lion (someone correct me if I'm wrong)
iCloud – Lion Needed
Contacts
Safari bookmarks
Notes (actually this might be possible without Lion through iCal, haven't tested it)
Photo Stream
Documents & Data
You'll need to decide if it's worth moving to Lion for these other items. It depends on how you use your phone. For me, personally, the things I want to auto update are those things that change the most – like the calendar, reminders and mail. So I didn't see much use in "upgrading." I almost never update my contacts so having contacts update instantly isn't that important to me (it can wait until the next sync). Documents & Data only works with Apple's document software (not with Microsoft Word, PowerPoint, etc.) so if your productivity software of choice is Microsoft's, that feature isn't of any use. You get the idea. You'll need to decide how you're going to use iCloud and decide if it's worth dealing with Lion.
One other note: Upgrading to Lion is only required for your computer to join in the iCloud sync. Even without Lion, you can use Photo Stream to sync images between your iPhone and iPad, for example. Or your iPad and Apple TV. The photos just won't show up in iPhoto unless you have Lion.