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I recall iOS5 beta1 does not do this which cost me scores of saved wifi passwords on my iPhone.
Also another question says application keychain data is not backed up, just want to check if there's exception for Wifi password cause they are pretty often used but hard to remember.
iCloud Backups of iOS devices include the Keychain of all saved passwords on the device, including WiFi network passwords, however that keychain is signed against the UDID (The Universal Device Identifier, a unique ID for your device).
If the UDID does not match (examples being if your device was replaced by Apple due to failure or you purchased a new one), than the key store will not be able to be opened, and your passwords will need to be re-entered on the device.
Macs using iCloud backups do not back up the Keychains at this time.
MobileMe used to provide Keychain sync, and hence also a kind of backup of your WiFi passwords. However, with the introduction of iCloud, keychain sync has been dropped from the list of features. If you would like to see this to come back, you might want to try giving feedback to Apple at this place. Apple may (or may not) listen to our complaints.
Apple has published a documentation describing what content is stored in iCloud and what content is sent over the internet.
It is not explicitly mentioned if passwords are stored in the backup.
Apple encrypts data that is stored to deliver the iCloud service. Encrypted data includes:
Photos in your Photo Stream
Documents in the Cloud
Backup data for your iOS device
//Does this include passwords?!Contacts
Calendars
Bookmarks
Reminders
Location data for Find My iPhone, iPad, iPod touch, and Mac
Location data for Find My Friends
It stores settings, including wifi passwords but if you restore your device and restore from iCloud on your device you will have to put in the password to your wifi to set it up. While it restores settings it restores your wifi settings too.
I have to say that I went to a friends house and entered the wifi password on my iPhone. Later when I got my iPad out and started using the Internet without having to enter the password again the iPad. I only realised this the day after hence why I am now searching 'does iCloud store wifi password'.
I guess it must.
