Recently I've been frequently asked; "Is virtualization is cloud computing?" So this next bit may sound a little odd coming from someone who has built a cloud computing platform on the basis of server virtualization. Although virtualization is an ideal building block for a cloud environment, saying that "virtualization" is the only basis for cloud computing is wrong. Notably Google uses little to no virtualization technology and is seen as the poster child for the cloud computing movement. They recognized that cloud computing is about the move away from the desktop to a network centric software model.
The key to cloud infrastructure is abstraction to the point that it "just doesn't matter". Your infrastructure is always available and completely fault tolerant. Think more along the lines of the iphone application delivery model (App Store), and less like the desktop application models of the past. The companies that will success are the ones who embrace this new hybrid internet centric model. More simply, the Cloud is the computer.