Let's work through an example.
In the image on the right, dark areas are cloud free. There is a solid area of cloud in the western Bay of Plenty, you can see it along the eastern side of the Kaimai Range. There is also cloud around Taranaki, although there appears to be breaks in it. Cloud is also along the South Island West Coast, but there are gaps in the cloud in northern Westland and Buller. Most of the east of the South Island is cloud free.
The red arrow indicates an area of very smooth looking cloud. This is stratus. We can’t be totally sure of that from the satellite image, so other information is needed. In this case, the Christchurch METAR reported BKN008. It would also be worthwhile looking at the Kaikoura cloud base.
The yellow arrow indicates an area of cirrus, although we can’t be sure of that from this image alone either. We can, however, tell there is cloud in the area and that it’s thin enough to see the ground below. The Dunedin METAR may help, but the infrared satellite image is the real key in this case (bottom image).