Cloning is the practice of copying an installed operation system with applications and all to another pc (instead of reinstalling everything). The normal procedure is to create an image of the OS (which is a huge file), and then you can copy that image to any new system (instead of booting windows CD, installing drivers, installing apps, etc...) and then boot that new computer and everything will be installed and working.
When it comes to Vista cloning capabilities, Microsoft basically removed the similar-HAL restriction.
That may not sound like much, but with windows XP, cloning would only work on computers with the same HAL (low level drivers, that is CPU, Power Management, and a bunch of other drivers). In practice, even computers with the same HAL sometimes would not be able to run the same image.
Yet administrators still use cloning, because it has lots of potential. Basically it can cut down installation time from 3 hours work to 20 minutes unattended.
Now with Vista, you can use the same image across computers from any hardware, even virtual machines. No more need to keep dozens of different images for different hardwares...
Here is where I read the news:
http://4sysops.com/archives/no-more-hal-hell-the-implications-of-windows-vista%E2%80%99s-hardware-independent-imaging-technology/#comment-125059