You probably don't need the API key. The new CLI, 0.9, uses OAuth instead, so it will prompt you for your user name and password once. It will not store these but will instead fetch a token it can use to authorize your CLI commands. Use
pip install -U dotcloud
to update.If you really want to keep using the old CLI v0.4, the API key is here: https://account.dotcloud.com/settings/
Note that you can also use the API key with CLI 0.9 with dotcloud setup --api-key
and it will prompt you with the location of the key.
Why would you want to use the API Key? It is handy when you're working with colleagues with whom you don't want to share your user name and password. You can revoke/change your API key when you need to.
It is also possible to use multiple dotCloud accounts and switch between them with an environment variable. See http://docs.dotcloud.com/guides/accounts/