Hi all,
There are lots to methods of link cloaking and some valid reasons for doing it including making links look better to customers or trying to prevent commission theft.
Just be VERY careful and test your links to be sure they still track. Some methods of cloaking or re-directing won't pass your cookie properly. One of the popular ways of hiding affiliate links uses an I-frame and I-frames are against the TOS of some programs. Some link cloaking software on the market auto-sets a cookie and cookie stuffing is unethical and against the TOS of many programs too.
My favorite way to re-direct is using subdomains - IF your host gives you unlimited subdomains, which mine does and that's why I chose them.
Shareasale is my favorite affiliate network for many reasons - so I'll use that link as an example.
My raw affiliate link - mouse over to see it - very ugly!
Shareasale
My subdomain link: mouse over to view.
Shareasale
Now click and see what happens. There is a very fast redirect where my affiliate ID shows for a split second but then it resolves to the Shareasale home page. Most end users would have no idea it was an affiliate link and would not even notice.
If you are looking for a host with unlimited subdomains, I use Hostgo. They are pretty good and hosting starts at only 6.95 a month.
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So do you cloak your links? Yes? No? Why? Inquiring minds want to know! What method do you use or what method do you think works best?