CNAME is, simply, a way to alias a domain. A CNAME record is added to the DNS (Domain Name System) to point a domain name to a different domain name. Allowing it to appear as if a site hosted at a different domain was actually being served from my domain.
I’ve used this in the past to redirect my mobile visitors to a mobile website. In my case, the mobile website was hosted at the domain of another web developer, not my own. To make the redirect work seamlessly and appear to the user as if they were still on my domain, I enter a CNAME record.
m.nerdcollege.com CNAME nerdcollegemobile.com
I install a script to detect for and redirect mobile browsers to nercollegemobile.com but because my CNAME is in place, it appears to the user that they are on m.nerdcollege.com
Read a fuller and more technical explanation of using CNAME records on Wikipedia: CNAME record