Apps that can access iCloud have a different Open dialog box than we've been used to seeing; the popup menu at the top that lets you navigate up the file path from your current location is missing.
Well, not missing, exactly, just hidden. When you are in the Open dialog, and choose On My Mac, you see the name of the application, then a dash, then the current folder. You can Command-click on the folder name to display a pop-up menu showing the full path for the current folder. There's no visual clue that this is present, but it works.
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Mac OS X Hints
http://hints.macworld.com/article.php?story=201208111053143