Clouds
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Clouds change color depending on certain events. During the day, clouds are white. At twilight they turn maroon and at night they turn a dull gray color.
Clouds also change color when you enter the Corruption biome - a yellow-brown color during day, and blood red at night. The clouds are also blood red during a Blood Moon. They also turn to a lime-green when you enter a Surface Jungle.
Clouds have no real function in the game, except for creating a more sophisticated and "living" background.
Clouds vary in sizes, from being ~1.5 blocks tall to 5+ blocks tall.
There is a limit to the amount of clouds that are generated, though the exact value is unknown.
As of 1.1 there are less clouds seen because of the new backgrounds such as trees, mountains, and rainbows