Hmm... I'll do my best to describe it.
A Christmas cracker is a cardboard tube (about the length of a bog roll tube) wrapped in some shiny paper which is twisted at both ends to make a sealed tube with two paper "handles". Two people operate it, one person holds each handle and they pull. Eventually one of the paper handles rips off and whoever gets the larger part of the cracker gets the toy (and usually a lame joke and paper crown) that is hidden inside the tube.
The toy could be anything from a badly moulded plastic car to a fake plastic necklace to a stapler or small deck of card (depending on how rich your parents are)
The girls in the picture above are holding one, if you want to see one (The one on the orange hat is going to win, she has much better technique and hand positioning)
-Kev