A link cloaker is like tk.com (Not sure on there URL)
Anyway basically the way they work is they get a URL e.g. mysubdomain.domain.com and change it to a specific url that is shortened. So e.g. with the tk.com
you could have
mysubdomain.tk which will than refer to the mysubdomain.domain.com site. From what ive seen they are free of cost.