Ok this is a confusing one but heres what I think the definitions are.

Hacker:
Proper Use: Anyone who writes code
Popular Use: Someone who breaks into banks and steals millions (e.g swordfish)

Cracker:
Proper Use: Someone who illegally gains access to someones computer AND someone who finds holes in software and develops programs to use the software illegally (i.e Keygens)
Popular Use: Mainy the software cracker