I am a member of VMUG in The Villages, Florida. Your iCloud book was recommended, I bought it, read it, and now understand iCloud better. My wife recently reluctantly agreed to get an iPhone 3GS. She was visiting the grandchildren while I was home reading your book. She used the iPhone to take pictures, came home and handed it to me.
The first thing I did was the IOS5 upgrade and set up iCloud for her. She uses the iPhone and shares my iMac. I have an iPad which she doesn't use. I only set up iCloud for her for backup and pictures.
When I went to look at the pictures, there was nothing there. Where they lost during the upgrade? Can they be retrieved? I appreciate any help.
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I can't say for sure what happened without looking at the devices, but there are a couple of possibilities. One, check the iPhone's Camera Roll (not sure if you looked there already). Two, check iPhoto on your iMac, in case it decided to import them. And, of course, check your Photo Stream. If the photos are in none of those places, then I suspect they are lost, although I don't quite know when or how that would have happened; they should not have been touched during the upgrade to iCloud.