iWork Documents do not sync with iCloud.
If I create a Pages,Numbers,Keynote doc on my iPad 2, it pushes up to iCloud no problem. It will not, however, push it over to my iPhone 4S. Yes, they are on the same iCloud account. Settings are all switched on.
Photostream, however, does work.
Pics taken with iPhone move to iCloud, appear in iPhoto, come back down to iPhone photostream. iCloud backup also works.
It's just the documents suite that will not propagate to iPhone.
iPhone 4S, iOS 5.0.1