Howstuffworks to the rescue:
”[The] Golgi tendon organs (a set of nerve endings involved in humans’ motion sense) are stimulated and the muscles surrounding the joint are relaxed. This is part of the reason why people can feel “loose” and invigorated after leaving the chiropractor’s office.”
The article also explains that there is no evidence of arthritis and cracking your knuckles, though some crackers did experience “soft tissue damage to the joint capsule and a decrease in grip strength.”