Hello tw_mama,
I was looking into the issue you are experiencing and found an article that may shed some light on the subject. It's called iCloud: Account troubleshooting found here: http://support.apple.com/kb/TS3988
This section in particluar:
I get an "Unsupported Apple ID" error when I try to sign in to iCloud from my iPhone, iPad or iPod touch.
Depending on how you created your Apple ID, you may not be able to create an iCloud account with your current Apple ID. If your Apple ID works in the iTunes Store, App Store, Game Center, FaceTime, or with other Apple Services, your Apple ID should work for iCloud. Also, if you created your Apple ID while you applied for a job at jobs.apple.com, your Apple ID should work for iCloud. If you cannot use your Apple ID with any Apple Services, it might not be compatible with iCloud. Contact iCloud Support for assistance.
All the best,
Sterling