Since MobileMe is closing down 6/30 in favor of iCloud, if I want to keep my .Mac account active, I have to upgrade (?) to OSX 10.7 and I am wondering if the kinks are out yet.
Yep, same boat here...and at 10.7.3 I think it's "safe" for at least a simple, non-production Mac if the hardware is recent. The older and more complicated the hardware, the greater the likelihood of some issues. There are still some bugs impacting Photoshop–generally mild, display driver related issues when using the GPU. Some people have to run Photoshop with the GPU set to basic or turn it off, which generally resolves the issues.
If you have 3rd party PCI cards, it's a little dicy...you should check to make sure the card maker has updated Lion drivers.
Personally, I've already upgraded my laptop to Lion without any real issues other than Rosetta issues and some older software not working. That's the same machine I use to sync my iPhone and iPad, so I'll be switching to the iClout shortly. But ,my main machine which is my production machine will only get switched when I'm out from underneath a bunch of projects already in the works, done. Maybe this summer (and after a 10.7.4 update and making sure all my 3rd party hardware will run).
Also remember when you switch to iCloud, iDisk does away...another factor in the event you use that a lot (me, not so much but occasionally).