Link Cloaking: Cloak and Dagger in Affiliate Marketing
"Cloak and dagger" sounds like a joke, but it's truer than you might like: if you don't cloak your affiliate links, you may get stabbed in the back. If I were to advertise this link: http://www.traffichoopla.com/cgi-bin/update.cgi/13196/ it would be very easy for you to just cut it off after http://www.traffichoopla.com
It wouldn't necessarily need to be a malicious act, maybe just laziness on your part, but if this were a program where I got paid per click on my affiliate link...I wouldn't get paid. If you slipped your own affiliate username in the link, you would get paid. If I earned a commission on a purchase, I wouldn't get it and you might.
There's another reason to cloak your links. If you're half the affiliate that you should be, you are promoting your link all over the internet. But as we all know, affiliate programs come and go, and so does our interest in any particular program. What happens when you drop a program? You have to scramble to find all the places online where your defunct url is residing, so you can change it or remove it. Chances are they won't all be found.
You can use one of two ways to cloak a link that involve creating html files, or you can use one of many services that cloak links for you. The advantages to creating html files on your own domain is that you only need to edit them when you drop an affiliate program, you get links back to your domain, and you get page views that improve your Alexa rank.
You can go here to find the two kinds of html code to choose from: http://www.selfseo.com/story-13929.php There is also a list there of cloaking services if you decide to go that route.
No matter how you do it, cloaking your affiliate links will protect your affiliate earnings and save you time and trouble in the long run.