The Google definition of Cloaking is as follows:

The term "cloaking" is used to describe a website that returns altered web pages to search engines crawling the site. In other words, the web server is programmed to return different content to Google than it returns to regular users, usually in an attempt to distort search engine rankings. This can mislead users about what they'll find when they click on a search result. To preserve the accuracy and quality of our search results, Google may permanently ban from our index any sites or site authors that engage in cloaking to distort their search rankings.

Clearly cloaking is a black-hat search engine optimization (SEO) technique and is likely to have a negate impact on the search engine ranking of a site.