Cracked means that in the server.properties file online-mode is set to FALSE.
This means the minecraft servers won't authenticate every username that attemps to login into the server, to see if he is premium or not. If he is not, access will be denied. With online-mode set to FALSE, this is not the case and anyone can join, payed or not, because the minecraft servers won't authenticate.
Being "cracked", last time i saw, is supported by notch