Cloaking means, that you link to one page within your site and on this page you redirect user to affiliate link. So visitor can't find out that this is an affiliate link. This is in general, not just for CJ.
Link cloaking can be more involved also...for example some affiliate link cloaking programs will open the advertised site in a full-size frame, making the URL and web page title look like people have never left your site. My understanding is that some vendors prefer you NOT do this, it's OK with others.
There are multiple ways to cloak links, as mentioned before one is a simple redirect such as: You go to www.Yoursite.Com/Offer-URL-Here.php and the page would be a simply redirect to the affiliate URL with your tracking code in it, ex. www.AffiliateURL.Com/YourtrackingId/asdgsdg/ What theArteffect is talking about is putting an affiliate landing page in an Iframe, im not sure how CJ feels about it but I know Azoogle is fine with it. All you do is simply setup an Iframe that is using the Affiliate landing page with your tracking code in as the source of the content for the iframe.