iTunes Match, another iCloud app, will basically function as a locker for your iTunes library. If you have music that isn't purchased from iTunes, it will match the media in your library with content available in iTunes and allow you to stream it to your devices wirelessly. (What happens if something you have isn't available in iTunes? Do you still need to sync it?)
Apple is saying this process will only take minutes, not hours. All the content will be DRM free and have the same benefits of purchased music. Any songs will be matched and upgraded to 256kbps AAC DRM-free files.