1. To shorten links so they look pretty/branded for your own brand


2. To make a link look like it is a clean link to someone else's brand (you need permission to register domains for other people's trademark quite often, and always best to ask)


3. To shorten links so they don't get broken in emails due to the way some characters are handled


4. To boost the number of citations of your domain (SEO benefit)


5. To add in specific tracking code for clicks to determine popularity


6. To add in specific tracking code for conversion tracking (think Prosper202)


7. To gain social proof and boost viral impact (Tweetmeme buttons)


8. To add in various javascript based tracking such as Google Analytics in situations where you can't use onclick.


9. To track activity from referrers that don't pass on useful referral data such as Twitter clients


10. To improve email delivery on your own behalf - you have built up a good sender score, so want to use it for your advantage


11. To improve email deliver at the request of a vendor - often for product launches you are required not to use direct links.


12. To split test landing pages


13. To split test different products


14. To be able to change the link at a later date
    1. Dead links
    
    
    2. Updated offer
    
    
    3. Fallen out with vendor
    
    
    4. Better convering offer


15. As an affiliate tool for viral marketing (see Harvey's Ultimate Super Tips for inspiration)


16. To achieve deep linking to anything even when it is not supported by the affiliate system.


17. To have a URL bar for branding aka hootsuite/prettylinks


18. To have a URL bar for additional viral sharing buttons


19. To have a url bar offering a search box or related content suggestions from your own site


20. To have a url bar offering top rated content from your own site (think Stumbleupon su.pr)


21. To mask the URL of the page


22. To mask the title of the page


23. To stuff cookies - I am not advocating stuffing affiliate cookies without network or vendor explicit permission, and there are "whitehat" scenarios


24. To boost view counts for sites like Alexa


25. Redirect page can be blocked with robots.txt


26. Redirect page can link to further redirects that are blocked, but have links back to your own site


27. Pretty URLs


28. To hide referrer details from affiliate network


29. To hide referrer details from ultimate destination (as affiliate)


30. To hide referrer when you link to something from a private member site


31. For load balancing


32. To prevent SEO juice for affiliate network


33. To prevent SEO juice for vendor/3rd party (not a vote)


34. To get a framed page to rank


35. When split testing a landing page on a site without php, you might use various shortened links as you can't easily use dynamic subids for every visitor


36. As a SEO safeguard especially for viral marketing when doing something pointing to a money site. e.g. you release lots of free themes with spammy footer links - Google decide to slap you, how do you repair the damage?


37. To hide that a link was initially seeded by you - if you use a branded shortened link, it is obvious you had something to do with it.


38. To include disclosure - say you direct link to an affiliate offer from Twitter - you could have an iframe with a disclosure statement, or a delayed meta refresh.


39. To use some sneaky popunder advertising


40. For geo-targeting


41. For language targeting


42. For behavioural targeting


43. Because a "guru" told you to and you don't want to look like a newbie


44. To hide affiliate links from Googlebot (Search)


45. To hide affiliate links fromMediapartners-Google (Adwords)


46. To hide affiliate links from spy tools used by other affiliates - some really smart things can be done to block people sniffing out your various sites


47. To block bots grabbing your content


48. To Rickroll people


49. To help you rank a frame for another geo-location


50. To unify brand ownership of white label systems (Google Apps, Raven Tools etc) though this is more often cname than cloaking

This isn't a comprehensive list, I just did a 30 minute brain dump

Can you think of any I have missed?

Here are some reasons not to cloak links

1. Sometimes any form of url masking is banned by the affiliate program


2. You may want people to be able to see that a link is going to a nice safe place on Amazon.com as people often don't care if there is an aff in there or not


3. Sometimes some forms of redirects/cloaks dont work with some affiliate programs


4. Some methods as I mentioned require explicit permission or are almost universally frowned on


5. Some vendors or networks want to know where your traffic is coming from, even down to monitoring what keywords you bid on. (they can go to hell or pay for it)


6. Security - various tracking scripts can get hacked just as easily as WordPress


7. Centralization is only a good idea if it is secure, backed up etc


8. In some situations where you have a coupon, you might want to use a clean link


9. Some methods of hiding links with javascript don't work when the content is syndicated


10. It places some small extra load on a server


11. It is something else that needs to be migrated if you switch server


12. If you switch tracking software, how easy is it to migrate links?


13. As mentioned, you might not want people to know that a link being spread originates with you, so you might use bit.ly with no other tracking so it looks organic


14. The more you get into it, the more complex it can become thus you need better systems and a better technical understanding. Lots of marketers don't even split test their email campaigns on a big launch, though they might not do it suggesting they are trying to be more transparent


15. The method you are using is incompatible with an advertising partner, such as Google Adwords requiring the back button to work.