CNAME stands for 'canonical name' and is a redirection to the zone file of the entered target domain. All entries (NS, MX, A) therefore apply to this target domain. CNAMES are primarily used to make it easier to maintain domains with the same basic data, or to assign other domains entered in the same zone the same data as the zone itself.
A CNAME record lets you assign a domain or sub-domain to another address or hostname.
You can use cname records in a number of ways.
For example you may have mywebsite.com as your domain name.
If you are worried about someone typing your domain wrong, like ww.mywebsite.com or wwww.mywebsite.com usually that would result in a page not found error. In order to combat this, you could set up a cname record on your domain for ww.mywebsite.com or wwww.mywebsite.com to point to www.mywebsite.com so that even if someone mistyped the number of "w's" they would still be redirected to the correct location by the CNAME record.
You can also use a cname to point a domain to another domain, similar to web forwarding you could create a CNAME record for your domain which points to purpleserve.co.uk. So when you type in www.mywebsite.com in the browser, it will direct you to the Purple Serve home page.
In summary CNAME records can be used in a number of ways, hosting providers may also ask you to use a CNAME to connect your domain to their hosting service where necessary for example Apple commonly uses web.me.com.
