How does Xbox music work?

I posted this in another thread a few days ago, but it seems to have got lost, so... could someone explain how Xbox music works?

  • To get cloud syncing do you need the subscription?
  • If I’ve added all my ripped cds on my Win8 desktop into Xbox Music, do they sync (or is it just stuff purchased from Zune/XBM)?
  • Do they get uploaded or do Microsoft just match the tracks?
  • Are they then streamed on a WP8 as I play them, or are they synced and downloaded? What about a console? Or another pc?