The idea is to create an embryonic clone of a patient, then transplant altered versions of that embryo's cells back into the patient. Because the DNA of the transplanted tissue would match the DNA of the patient, the immune system likely wouldn't reject it.
From the WSJ's Health section on Thursday, in an article reporting that monkey embryos were cloned by scientists in Oregan. (Originally reported in Nature.) The next step is to take a rhesus embryonic clone to full term "and thereby create the world's first cloned money." Next is to test "whether fresh tissue derived from rhesus clones can treat diabetes or other diseases in a monkey, a process known as therapeutic cloning."
And the next step after that? Oh, we already know that, there was a movie about that two years ago.