It sounds like you are really talking about making it so visitors/scrapers cannot tell your links are affiliate links, not actually cloaking the content of your pages... I'll assume that's the case and attempt to answer your questions:
Should I cloak these affiliate links, or leave them as is?
There are many ways to "cloak" affiliate links; i.e. make them look like a regular ol' link. Some are better than others. I don't think there is anything "wrong" with doing it, and it should be search-engine neutral to your site.
If I should cloak them, will google penalise me or will it work to my benefit?
There should be no penalties involved.
What are the pros and cons of cloaking in regards to my website, as I have a great deal of content and information on there?
Doing this type of "cloaking" really doesn't have any cons that I can think of. There are two obvious benefits:
Visitors will see a link to a page on your site. If they click on the link, they are redirected to the affiliate site, but they may be more likely to click on a link which leads to what appears to be a local page.
Scrapers, scammers, and scumware companies won't be able to hijack your affiliate links.
And how should I go about cloaking affiliate links?
Create a PHP script which will redirect visitors to the affiliate landing page(s). On your content pages, instead of linking directly to the affiliate landing page(s), link to the PHP script which does the redirection. Your PHP script can handle logging, too, so you can keep some statistics if you like. In the actual links, I recommend using the rel="nofollow" attribute. Make sure the PHP redirection script is excluded in your robots.txt.