Making clones like Dolly the sheep is a very inefficient business. Just 1 to 5% of clones mammals survive to birth, and lots of those have health problems.
Science Now is saying that at least some of the problems can come from the specific stages in the development of the cloned embryo. Keth Latham's group has found that technical matters like changing the culture medium can enhance the number of survivors up to nearly 50%. The Science Now blurb also says that many very early cloned embryos show pretty massive disturbance of their gene expression patterns.
A much earlier report mentioning Latham's lab is here. In the older work, they found that the genetic fertilization and other initial steps went fine, leading to the current work where they considered later stages.
So there's some progress in identifying the scope of the problem. But it sounds like if you want to clone your pet kitty you're still going to have to wait.