Cloaked Domain pointing to a real site. How is it done and Why?

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You cloak because you can keyword stuff a crappy site and send all the traffic to your "real" site an monetize it accordingly.

It's done by determining which users are human and which ones are the search engine spiders and showing each the content you want them to see (humans go to the real site, spiders get the keyword stuffed content).

There are several ways to determine if a visitor is a bot or human, but the most reliable is by IP.
 
Another reason to cloak your affiliate link, is that your link may get changed by hackers to their own.
Also many of the affiliate links are far too long and ugly looking. They are obviously affiliate links and that may deter someone clicking on it.
 
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