If you're a cloaker, you will most probably (95% sure) get caught, reported, banned, whatever. The real question is, is it worth the effort? Since people don't like to share their secrets, here are some tips that newbie cloakers can play around with, since they are general knowledge with a few edgy tips and tricks.
Remember, cloaking tools = scripts, methods, approaches, tactics. People who just use scripts and artificial page generation are bound to get banned or caught much quicker than someone who uses specific tactics for specific engines. Tactics like different keyword approaches, custom methods and scripts, and less greed for particular keywords, plus having SOME content on them, that isn't pure spammy crap - so that they can still definitely be categorized as regular sites if you removed the cloaking tools. Use these approaches and you will have your domains on the engines for many months to come.
To properly cloak, let's take into consideration, what you would need to do:
1. At least 100 URL's to play around with - Keep in mind that it's better to use dummy URL's because you don't want your mother URL banned or reported. 100 URL's to play with means you should have an arsenal of at least 100 URL's for the keywords that you are targeting. When one goes down, you still have 99 more in the index, while ‘dummy URL's’ refers to creating ‘cloaked only’ URL's that point to your main URL.
2. Multiple IP's - I don't use more than 3-5 domains per IP. IP's are cheap, don't pack all of your domains on one IP, otherwise you'll get caught a lot faster than you think.
3. Don't submit directly to Google - I've found that when I don’t submit directly into Google, even though it may take a bit more time than usual to get indexed properly, the sites almost never get banned. They'll just be removed from the index from that month, which means you can just list them in a different engine again, without worrying about the blacklist. I think the reason for this is because it is not directly submitted to Google, so you don't exactly have to follow their guidelines, therefore you cannot be penalized for it.
4. Put keywords and paragraphs of your cloaked pages inside the index of the main cloaked URL to fool competitors into thinking there is no cloaked pages but just a keyword and content saturated website. They'll probably try and out-do you for a few months before they catch on. But that’s well worth the time.
End results: I've been successfully cloaking pages since 1997-98'ish. I've had loads of URL's banned by jealous or pissed off competitors, but I'm still doing it, because even though it's tough at times, it's WELL worth it. As long as you don't get greedy with the keywords, you'll stay under the radar for a while longer than normal.
Depending on the industry you are cloaking for, you will make a lot of money if done properly. Sites of mine that were made years ago, are still on top spots, and still making a lot of money. Good luck!