Here is a simple explanation:
On a Windows-based computer you run exe files, right?
Well, on Pocket PCs (like the Touch) a CAB is like an exe on a computer.
In other words, whenever you install something
from a CAB it means that you transfer a CAB file over to your phone, and then run it by clicking on it from File Explorer. With a CAB there is no need to connect your phone to your computer to install it.
I hope this is helpful. If you still have questions, please let us know.
MM247