The "Crack" apparently occurs when gas is sucked out of the synovial fluid in the expanding joint. It gives roughly 20% extra mobility to the joint, which is why pianists do it too. Apparently, the story about it causing arthritis is a myth, but if done habitually it does lead to thickened cartilage around the cracked joints later in life, which reduces mobility slightly.
I know this because I'm a habitual knuckle cracker, and read up on it when I got the opportunity
