I have version OS X 10.5.8, how do i upgrade to 10.8

That very much depends on what Mac you have, and you forgot to tell us!

Start by checking if you can run Snow Leopard:

Requirements for OS X 10.6 'Snow Leopard'

http://support.apple.com/kb/SP575

The OS 10.6 Snow Leopard install DVD is available for $19.99 from the Apple Store:

http://store.apple.com/us/product/MC573/mac-os-x-106-snow-leopard

and in the UK:

http://store.apple.com/uk/product/MC573/mac-os-x-106-snow-leopard

but nobody knows for how long it will be available.

When you have installed it, run Software Update to download and install the latest updates for Snow Leopard.

You should now see the App Store icon, and you now need to set up your account:

http://support.apple.com/kb/HT4479

To use iCloud you have to upgrade at least to Lion, but some functions are only available in Mountain Lion:

http://support.apple.com/kb/HT4759

You can also purchase the code to use to download Lion (Lion requires an Intel-based Mac with a Core 2 Duo, i3, i5, i7 or Xeon processor and 2GB of RAM, running the latest version of Snow Leopard), or you can purchase Mountain Lion from the App Store - if you can run that:

http://www.apple.com/osx/specs/