Roy, one of my members, made me aware of this and thought I'd share this will all of you. I researched this and found this article that explains it better than I ever could - so will copy and paste it for you. Hope this helps. This is from askdavetaylor.com.

I've been reading a lot lately about affiliate link hijacking and link cloaking. Do you recommend any particular link cloaking software or technique and/or are there any particular ones to steer clear of? I saw one 'Covert Affiliate' that in addition to cloaking affiliate links puts a tracking cookie on the visitors computer even if they don't click on the link. They talk about having the 'unfair advantage'... that concerns me that if you're doing something 'sneaky' that it could actually bite you in the butt down the road.

Dave's Answer:
This is a great question, actually, and everyone who is involved in any sort of affiliate program where you get paid a commission on completed transactions (for example, Amazon's Associates program), needs to pay attention to this situation!

The problem is that unscrupulous adware, spyware and other malcontents have software that they install on your computer - sometimes with your consent - that also automatically rewrites affiliate links on pages you visit. For example, you would then innocently pop over to the Web page for my book Growing Your Business with Google and click on the 'buy this book at Amazon' link, thinking that you're cool that I'm going to make an additional $0.75 on the transaction through the Amazon affiliate program.

Surreptitiously, however, that link is rewritten to use someone else's affiliate code, giving them the credit - and commission - for the sale.

Not a huge big deal, but now imagine that instead of visiting my site, you're actually on the Web site of your favorite charity or organization and you want to show your support of the organization by using its affiliate links, thereby making a contribution to the group by doing your regular shopping (a great way to support charities, in my opinion!). But, you guessed it, the charity doesn't see a dime and instead some lowlife gets the affiliate income instead.

I know about the problem, but for possible solutions, I turned to my friend and colleague Shawn Collins, who runs the great Affiliate Summit conferences (and yes, there's another coming up in July at Disneyworld and I'll be there, speaking about weblogs and blogging!)

Here's what Shawn had to say in response to this question:

There are two ways you can go about cloaking your links: set them up yourself or buy a program to automate the process.

Personally, I do it myself. In some cases, I use a little mouseover script, but that's just to trick the casual observer - it won't beat the schemers and spiders.

In the past, I've also used frames to cloak affiliate links. This has its limitations, but it's quick and easy.

Another method is to purchase a domain and use the domain registrars forwarding service (free with most domain registrars) to have the domain redirect to your affiliate link.

The technique I use most often is the .htaccess redirect. An .htaccess file is a plain ASCII text file you place in the root directory of a Unix server.

The .htaccess technique is much easier than using other redirects, because there's no HTML required. All of your redirects are in one text file.

One thing to bear in mind when cloaking your links is that you should add the afsrc parameter, so legitimate adware affiliates will recognize that you are an affiliate and not overwrite your cookie.

If you want to get a program that will help you set up the cloaked links, check out CBmall, search for cloaker or cloaking, and you will see lots of programs to consider.

As far as that program you mentioned that "puts a tracking cookie on the visitors computer even if they don't click on the link" - stay far away from that one!

That is known as cookie stuffing, and it's a big taboo. By doing that sort of thing, you're no better than the thieves you're trying to beat in the first place.

There's a third solution that Shawn didn't mention: using third party URL redirection services like Click Thru Stats that can make it easy to cloak your affiliate links too.

Thanks for your info, Shawn!!

Anyone wanting to cloak their affiliate links, you can join Roy's site and cloak up to 50 links - I have spent most of the day doing mine. Thanks Roy.

Click here to join and cloak your affiliate links