Azure IaaS is infrastrcuture as service. It is very similar to Hyper-V VMs that you create on premise. Azure provides cloud based Hyper-V environment where you can create you own VMs, virtual networks and extend those networks to talk to on premise resources
etc... Currently it supports windows and linux based OS.
Once you create your VM, you can use it as you are use it on your own environment (on premise).
is another capability on cloud where you can build your .net, php kind of applications where servers are managed by MS and you only worry about your application logic. You can use
SQL Azure for datastore where sql server is offered as service.
Azure web sites
is another feature, you can use it like you buy space from any ISV to host your web sites. You can use this feature for most of the well known technoligies like php, .net, java.
For Azure VMs using IaaS, you can take a look at this
link. Check the links
windows virtual machines,
linux virtual machines.