Q: How to use cell arrays ({})?

Basically, cell arrays are arrays of arrays ;-)
Here's an example:

 z={rand(2),rand(3);rand(4),rand(5)}
z = 
    [2x2 double]    [3x3 double]
    [4x4 double]    [5x5 double]
 z{1,1}
ans =
    0.6813    0.8318
    0.3795    0.5028
Arrays may be of different sizes and types. Especially useful are cell arrays to store text data:
 txt={'This is first string';'This is second'}
txt = 
    'This is first string'
    'This is second'
Note that in order to store the same two strings in a normal array, you'd have to pad them to the same length!

Another very useful feature is that z{:} is always equivalent to comma separated list: "z{1},z{2},...". So you can use the cell array to pass parameters to a function...

 attrib={'p-','color',[.5 .1 .7],'linewidth',3};
 plot(x,y,attrib{:})
 legend(txt{:}); % in fact, you can omit {:} here
... or from a function:
 grid={[],[]}; contours={[],[]};
 [grid{:}]=meshgrid(0:10,0:10);
 grid{3}=grid{1}.*grid{2};
 [contours{:}]=contour(grid{:});
 clabel(contours{:})
Besides, you can easily convert a cell array to a normal one:
 z={[1,2],[3,4,5]}
z = 
    [1x2 double]    [1x3 double]
 [z{:}] % again, equivalent to [z{1},z{2}] !
ans =
     1     2     3     4     5
As you can see, it can be a very powerfull tool! Explore it.
See also: HELP LISTS, VARARGIN, DEAL