IP cloaking websites is the process of providing web page content based on the user-agent (e.g. web browser, RSS reader, spider/bot) making the request. There are different ways to get value from using this technique.
Domain types.
When you cloak a web page, often a redirect is involved. Traffic is designed to go to the redirected domain, instead of the cloaked web page. Cloaking is used to provide different types of web pages (targeting different keywords) to increase the amount of traffic to the target domain. These are called promotional and non-promotional domains.
A non-promotional domain is the address of the actual site where you ultimately want visitors to land. A promotional domain is a second site setup only to deliver traffic to the main site.
Best Tactics for cloaking.
Cloaking, from your main site, works better. Over time, you build link popularity to url's delivering cloaked content to spiders. Along with getting a boost from directory listings, you also get the added benefit of greatly increasing the number/frequency of spider visits.
Be careful when using a secondary, or promotional domain, to serve cloaked pages. You redirect visitors to the "real" site. However, you have a more difficult time getting ranked for competitive phrases. No one ever wants to link to promotional domains.
Cloaking and flash.
Regarding flash, many sites use IP cloaking websites to deliver content to spiders. It really is the best way to deal with flash content.
Incorporate some javascript allowing you to check and see if the human visitors have flash installed. That way, you give them the proper page. You avoid forcing them, to click a link, to get the page they want to view.
Conclusion.
When IP cloaking websites there are tactics to use, and tactics to avoid.