
Light and fluffy clouds are easy to create in Illustrator and I'll show
you one way to create them. This tutorial introduces you to a few of the
Pathfinder filters and will familiarize you with the Drop Shadow stylize
effect in Illustrator 9+.
1. Create the sky background
Create the "sky" that the clouds will drift through by drawing
a sky blue rectangle with the Rectangle Tool. My preference is to cover
the entire artboard and resize it later, if necessary. When done, lock
this layer and name it "Sky"; it will serve only as a background,
nothing more.
2. Draw the basics
Create a new layer above the sky layer and name it "Cloud".
On this layer, use the Ellipse Tool and draw some flat ellipses (as shown)
and combine them in a manner resembling the shape below.

3. Unite the objects and Fill
With the Selection Tool, select all of the objects, then click the Unite
command in the Pathfinder palette. This combines all of the objects into
one.

Before moving on, toggle the cloud outline to a fill and color it white.

4. Offset the objects
Paste the copy in front of the original (EDIT > PASTE IN FRONT).
Simply pasting the object will likely put it out of alignment with the
original so use PASTE IN FRONT. Fill the copied object with a grey color
then choose PASTE IN FRONT again to place another cloud on top of the
grey cloud (this new copy will be white); offset the white object above
the grey object as shown.

5. Apply Minus Front command
Select both objects and click the Minus Front filter from the Pathfinder
palette. This, in essence, uses the white object to cut into the grey
object leaving only the grey portion. If you have some unwanted pieces
of grey (as shown here), select the grey object and ungroup (OBJECT >
UNGROUP) then delete the offending remnant.

6. Apply drop shadow
Unlock the original cloud object (OBJECT > UNLOCK ALL) and select
it and the grey object and group them (OBJECT > GROUP). From the Effect
menu, add a drop shadow (EFFECT > STYLIZE > DROP SHADOW). The settings
used here, are shown below.