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Hacking has a lot of meanings. In general, hacking can be used either to refer to manipulation of computers outside of normal use, or it can be used more specifically to mean illegal manipulation of computers, such as gaining remote access to another computer. The latter meaning is the one commonly used in the media.
If we use the second meaning, we have no word for "good" hacking, which is harmless. That could generate some misunderstanding. Some examples of "good" hacking are hacks that add options to the right click menu, change the text on the start menu, allow undeletable programs to be deleted (ex: Windows Messenger), or change the functioning of computer games. If we can't call it hacking, what could we call it?
On the other hand, if we use the first meaning, it's a little harder to communicate the idea that someone is doing illegal things with a computer.
In response to this, many "good" hackers have tried to invent new words for "bad" hacking. Among them are cracking and black-hat hacking. The "good" hackers would continue to be called hackers or white-hat hackers. A variation of this for hackers in-between "good" and "bad" is grey-hat hacking.
For the best clarity, the words "cracking" or "black-hat hacking" should be used for "bad" hacking, and "white-hat hacking" or "good hacking" should be used for "good" hacking.
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