Clouds are white, cloud-shaped blocks with a smiley face on them.
In the original SMW, Clouds are mostly placed in the upper screen half of a level, where they are not observable unless the player jumps very high or finds a vine which he can climb on. They also tend to be placed in a straight row since they are easily passable from both sides and the bottom, The top of the clouds is solid, so that Mario can walk on them.
The faces of the clouds always consist of black eyes and a smiling red colored mouth.
In Super Mario Bros. 1 and 3, Lakitu rode around in clouds that looked like this object. Super Mario World 1 was the very first occurrence of him riding around in a different-looking cloud, and he's used that cloud for every game since.
In Lunar Magic's Map 16 Pages, the cloud is located on Page 0x001 and is tile 106.
Clouds are also available under Standard Objects, as object 17-B (Object 17-A is a rope ledge). If you use this method to insert the object, you'll only be able to resize it horizontally.