WebWhiz asked "Is this the same thing?"
Danny's already responded to this. However, I think Danny's definition is a more useful one (and it's finer-grained). Picture the scenario in which different content *is* shown to the search engines (as a response to their particular limitations). The content isn't spam, isn't keyword-stuffed, but provides the search engine with info as to what the page or event the overall site is about. The search engine processes this but properly directs the searcher to the relevant page (be it flash-intensive, in frames, whatever). This scenario is cloaking, according to Google. However, it's not meant to mislead either the search engines or their searchers. As opposed to Scenario #2 in which technology is employed to serve a different page to the search engines with content that is irrelevant or poorly relevant to the site's purpose, theme as a whole.
That's an important distinction. I can see the search engines getting upset over returning irrelevant results to their users. [Results due to their search engines recording different content.] The key here is determining what might be considered deceptive and why. In the first scenario I describe above, the fact that different content is served to the search engines- is not in itself intended to be deceptive. And if the search engines direct their users to the appropriate page for their search, the users do not themselves feel deceived.
While I wish we could treat search engines as typical users, the truth is they're not because they are as limited (currently) as their algorithms. A human could look at a flash site and see if it's a good match for their search; most search engines cannot unless there's a corresponding html site. And so on.
Practicality: don't cloak (according to Google's definition) unless you're willing to hazard the risks.
But for now, I prefer Danny Sullivan's original definition since it explicitly states what's problematic for the search engines: what's indexed is different than what's seen by the searchers (and this gulf can make the search engines look bad- and cause their users to go elsewhere for better matches/higher relevancy). Also, it leaves flexible what may be penalized in the future as search algorithms improve (in terms of the variety of content to spider and index).