Usually, cracking applies for sharewares, especially time limited ones or others which need a special registration number. The cracker will usually dissassemble the program to bypass the lines of code that either take the time limit or ask for a key.
Also, a popular crack for games is a key generator. This will generate a key based on an algorithm used by the game.
Yet another one for games is a crack that allow you to play without the CD. However, since CD's are so cheap nowadays, it becomes close to useless.