YSK An app specific password can be created for iCloud accounts that have two-factor authentication enabled.

I've been trying to connect an application to my iCloud CardDav account, to sync-up contacts from another address book. The two factor auth associated with iCloud prevented the app from establishing a connection. I finally figured out an app specific password can be generated to access the iCloud account with a username and password:

• Go to http://ift.tt/k8WFVt
• Proceed to the Security section
• Click "Generate Password..." under App Specific Passwords

I'm sure there can be lots of debate regarding the bypassing of two-factor authentication in this case and even questioning the security of storing content in iCloud (or any other system). Fair enough. But you should at least know it can be done if you're trying to connect a CardDav or CalDav application to your iCloud account.