How does Airplay from iCloud actually work? Airplay from iCloud is part of the newest Apple TV update however I don't understand how it is supposed to work. Should I see a new option on my device when I'm airplaying something from it? This is all I could find on apple.com

Apple TV will play content from iTunes in the Cloud instead of your AirPlay device when possible. Requires iOS 7 on AirPlay device.

http://support.apple.com/kb/HT4448?viewlocale=en_US&amp;locale=en_US
Found this unofficial item:


  Today’s update also brought AirPlay From iCloud, which lets guests
  stream their purchased music, photos, and videos stored in iCloud to
  another person’s Apple TV. If you bought World War Z on iTunes, you
  can now go to a friend’s house with an Apple TV and watch it there
  without having to log into their Home Sharing account or store it on
  your phone. It’s all streamed from iCloud.


So, I guess you browse the iTunes store (or maybe the Videos app) on your phone, select something you bought, tell it to start playing, and then AirPlay it over to your friend's ATV.  Or your own ATV, I guess, although it would seem easier to play it on your own ATV using the ATV menu itself.