The cloud is one of the most common and most misused topology icons. A cloud icon is used to represent an unknown or suppressed portion of a topology, but careful attention must be paid to exactly how one is placed, as illustrated in the following examples.
From the above topology even the dimmest bulb can deduce that R1 connects hosts in the 192.168.0.0/24 subnet to the Internet. The are two subtleties to be aware of, however. First, R1's interface to the Internet is not illustrated. Second, R1 potentially has other connections to elsewhere in the network that are also not pictured. Compare the above the above drawing to this one:
Notice that the second drawing clarifies both subtleties; it reveals that R1 connects to the Internet via it's Serial1/0 interface, and verifies that no other connections from R1 are present. (If there are in fact additional connections from R1, our drawing is to be considered inaccurate or incomplete.)
Now let's consider an example where a cloud is used to fully encapsulate a device.
By placing the www.example.com server wholly within a cloud, we can illustrate that it exists, but also note that the path to reach it is unknown or undocumented. As the example above is strictly layers one/two, we draw the line from R1 to the cloud edge; a direct connection to the server wouldn't make sense.
However, we are free to make such lines when representing logical connections, such as a layer three VPN or a remote file share. Just be sure to maintain a sense of symmetry when connecting devices across a cloud. Either both end points should be explicitly labeled or neither should be.
Finally, avoid using clouds to group host devices, as is often done for some reason when representing wireless LANs. While a cloud could technically represent a partial view of a host subnet, its symbolism in this case is ambiguous at best.