Black Hat SEO Cloaking -Matt Cutts Explains

The Definitive Cloaking Video by Matt Cutts:

Cloaking (i.e. Misleading) is showing different content to users than to Google-bot 

Example of Cloaking: A user searching for a cartoon movie and end up in a porn page

Examples of White Hat Cloaking: 

Fetching different pages for different kinds of browsers, devices, IPs, browser language, or geographic locations, etc.