Hmm... Cloud could do hideous damage with his sword, but he wouldn't actually be able to sever any of Wolverine's limbs or his head, assuming that Adamantium is tougher than whatever make-believe metal Cloud's swords are made of.

Still, Wolverine's not invulnerable. Cloud's stronger, has superior reflexes, and advantages in agility and reach, thanks to having a longer weapon^1. Cloud could quickly and easily do enough damage to kill Wolverine, I believe. Blood loss and tissue damage, facial injuries, organ damage - Wolverine's reinforced bones won't prevent those, and his healing powers can only respond so fast.

Personally, I think they'd be more likely to fight alongside each other, rather than face off against one another. Now that would be something to see...


1 Not a phallic reference