WP-Cumulus is now open source. Although based on an older version of the movie, the information on this page is still mostly correct. But why not get the actual source movie to play around with? See http://wordpress.org/extend/plugins/wp-cumulus/ for more info. You can get the development version which includes the sources from the download page.

Okay here is a pretty cool tutorial so you can create tagclouds within WordPress from the categories in your database. We will teach you how to use a class that we wrote so that every time you post an entry it is called and your tagcloud is updated.