Link Cloaking is basically when you show search engine bots one thing and humans another. Take a look at this article, it explains it. - Jens
Is you spent 10 seconds searching google you would have found many promising explanations. Here is one: http://www.tech-faq.com/cloaking.html
Cloaking refers to the practice of presenting different content or URLs to users and search engines. It is one type of black hat seo technique.