I found that after my first sync after upgrading my iPad to IOS 5, I was already running out of space in my iCloud account. Of course, the option to buy more space was immediately offered, but after doing a little digging, I was able to drastically reduce the amount of space I was using for backup. Here's how:
1. Go to Settings, then choose iCloud, then Storage
2. Select Backup/Manage Storage
3. Select the device you want to edit
4. Deselect any Apps which you don't need to backup - especially those that don't include any data, those with data you have backed up in other places (like my photos) and apps that you can easily re-download from the App Store if you need to.
That's it - I was able to cut my iCloud usage by about half by eliminating just a few apps. Now I need to figure out how to use the space I freed up!
Here's an Apple Support article with more details: http://support.apple.com/kb/HT4847