Domain hacks are when you use the TLD to spell out or complete your brand name. Like Local.ly, parse.ly, Del.ico.us, Fabulo.us etc.
Such names generally seem like as clever branding strategy and are very popular nowadays. But, no matter how cool these hacks appear to be, the truth is that no one remembers to type them like this. Brand names are meant to be simple & memorable. These ‘hacks’ add the complexity of a dot in the brand name, which may not seem like much of a problem at first. But once people start referencing it in emails, social media, forums, chat groups etc, the problem of people writing it in multiple ways becomes quite evident.
The popular link-shortening website Bitly uses bit.ly for their service but has now shifted to bitly.com as their primary address. Many other companies that have used a domain hack are now moving to more stable options.
My advice is to stay clear of domain hacks, as they’re just not worth it.