So that's what i tought.....so the new iCloud features within Mountain lion such as syncing notes, reminders and all the other good stuff can only be done through using iCloud....if not the regular calendar, contacts, mail accounts are the only thing you can sync???
Yes, that's basically correct.
Don't worry about iCloud. It is as safe and secure as humanly possible. Look at it this way. How much bad press would Apple get if iCloud wasn't safe and secure? People are at far greater risk using some homegrown "private cloud" than relying on Apple's professional engineers who do this for a living.