Help a noob understand the concept of cloaking

I have read through a lot of threads regarding cloaking your affiliate links but I cannot understand how to properly do it.

I google search and found some scripts that you havta enter your hoplnk into. It says you have to save it to your HTML and then save it under php and then uoad it to your website. I'm a little lost at this step.

I Am trying to promote products from clickbank so they would give you a hoplink which I enter as an anchor txt in my posts. Some promotions offer banners as well. From what I am getting, I am supposed to enter my hoink into a script and plug it into my website. I am lost in this step.

I am using WP. Any help would be most appreciated. Thanks in advance

1) Open Notepad program.

2) The write below code in the program
3) Upload it to your server .

Or you can simply use "Affiliate Link Cloaker" plugin for wordpress.