As a verb it refers to "breaking in" or "getting around" a software program. For example, there are certain newsgroups that post serial numbers for pirated versions of software. As a noun it refers to that serial number, for example "I've got the program I just need the crack." A cracker may download this information in an attempt to "crack the program" so that he or she can use it.
"Cracking" is the process of overcoming a security measure. "Cracking a key" means an attempt to recover the key's value; "cracking some ciphertext" means an attempt to recover the corresponding plaintext.