cloaking is a traffic technique -- not an SEO/ranking technique.
The traditional use of cloaking was with content generators (hence this forum section's name) to create 100s to 1000s of content generated and keyword focused page websites that targeted long tail keywords. Generators like TrafficEqualizer, RSSGM, yacg, SPG, DG, and others were all excellent at this back in the way. Cloaking was a way to take visitors to these (generally crap content) pages direct to an offer instead of relying on Adsense or affiliate clicks to monetize.
This technique still works and you see large corporations leveraging this still as well as smaller folks.
cloaking has two basic elements -- detection and delivery. Detection covers how to tell one class of visitor from another. Ideally you show search engines, etc. your content page and real humans your offer. Common detection methods are ip, UA, referrer, geoip, language, browser, etc. Delivery is how to give the destination page to the user. This can be a redirect, content replacement, frame, client side redirect, etc.
