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Covers are images that you can upload, or have already been uploaded to your profile. They act as 'main images' to your profile page, for which others can see. You can reposition the image as you wish, and it can be anything you like.
You can still do all of the regular stuff that you previously could do -- such as writing status updates, or checking into places, or even uploading photos. But here, you are given more additional options to categorise exactly what you want in your timeline. So, you can add life changing events or rites of passage, or just a status update. As with the slightly older profile, you can tag places from the desktop instead of using your mobile phone.
See here, the option to add a specific, targeted update to your profile, but retrospectively. The great thing about this new timeline is that you can go back and swap, edit and change content. However, as you will find out that the timeline does get a little personal at times -- personal even for Facebook. You can see here that you have the option to add "losing a loved one", which in my books is pushing it too far.