Clouds seem like an every-day experience. But -- do we know how clouds form on brown dwarfs and extra-solar planets? How do they look like? Can we see them? What are they composed of? Cloud formation is an old-fashioned but still outstanding problem for the Earth atmosphere, and it has turned into a challenge for the modelling of brown dwarf and exo-planetary atmospheres. Cloud formation imposes strong feedbacks on the atmospheric structure, not only due to the clouds own opacity, but also due to the depletion of the gas phase, possibly leaving behind a dynamic and still supersaturated atmosphere. I summarise the different approaches taken to model cloud formation in substellar atmospheres and workout their differences. Focusing on the phase-non-equilibrium approach to cloud formation, I demonstrate the inside we gain from detailed micro-physical modelling on for instance the material composition and grain size distribution inside the cloud layer on a Brown Dwarf atmosphere. A comparison study on four different cloud approaches in Brown Dwarf atmosphere simulations demonstrates possible uncertainties in interpretation of observational data.

10 pages, 4 figures, 2 tables. to appear as review proceeding to "Cools Stars, Stellar Systems and the Sun", 15th Cambridge Workshop