We examine the idea that diffuse and giant molecular clouds and their substructure form as density fluctuations induced by large scale interstellar turbulence. We do this by investigating the topology of various fields in realistic simulations of the ISM. We find that a) the velocity field is continuous across threshold-defined cloud boundaries; b) such cloud boundaries are rather arbitrary, with no correspondence to any actual physical boundary, such as a density discontinuity; c) abrupt velocity jumps are coincident with the density maxima; d) the volume and surface kinetic terms in the Eulerian Virial Theorem for a cloud ensemble are comparable in general; e) the magnetic field exhibits bends and reversals highly correlated with similar density features. These results suggest that clouds are formed by colliding gas streams. Within this framework, we argue that thermal pressure equilibrium is irrelevant for cloud confinement in a turbulent medium, since inertial motions can still distort or disrupt a cloud. Turbulent pressure confinement appears self-defeating, because turbulence contains large-scale motions which necessarily distort cloud boundaries. Density-weighted velocity histograms show similar FWHMs and similar multi-component structure to those of observational line profiles, though the histogram features do not correspond to isolated "clumps", but rather to extended regions throughout a cloud. We argue that the results presented here may be also applicable to small scales with larger densities (molecular clouds and cores) and suggest that quasi- hydrostatic configurations cannot be produced from turbulent fluctuations unless the thermodynamic behavior of the flow becomes nearly adiabatic at late stages of collapse. We expect this to occur only at protostellar densities.