Setting up a custom email domain with iCloud involves subscribing to iCloud+, pointing your domain to Apple's MX records, and potentially migrating existing email. Users log in with their iCloud credentials, and can manage family sharing. Common issues include problems with short domains, domain verification, email delivery inconsistencies, changing Apple ID primary email, and lack of support for subdomains and catch-all addresses. Ensuring correct MX, SPF, and DKIM record configuration is crucial for optimal deliverability. It's a full IMAP service, not just forwarding, meaning your email resides in your iCloud account.