If you've ever stumbled upon a crackvid without any warning, you were probably a little confused. The first time is always weird.
Fanlore defines 'crack' in fandoms as "fiction (canon or fanwork) with a fundamentally ludicrous premise, or otherwise including a plethora of unbelievable, incredible, or just plain silly elements." So let's imagine a universe where all of the Avengers are different kinds of bread, or all the Harry Potter characters are actually part of a Communist manifesto. That weird confused giggle in the back of your throat? That's normal.
So the short version is: crack vids are fan-made videos that are both ridiculous and awesome.
But how about the long version?
(Heads up: NSFW and spoilers abound).
This Captain America crackvid by Youtuber stevesbuck exeplifies a lot of common crackvid tropes. It's a pop culture mashup, designed to make us giggle. The juxtaposition of the humorous music and the tragic film scenes takes it to the level of absurd. The artist draws on well-known jokes (the 'mmm whatcha say' sketch from SNL for example) and relies on repretition to compound the humor.
This Teen Wolf video intersperses footage from other tv shows and movies, using the same format that Tumblr does with gifs to expand on the original scenes and explain what the audience's reaction would be. They say a picture is worth a thousand words, so clips give vidders the freedom to express a lot of feelings in a condensed format. This lets the vidder interact the the audience, and gives the fans a sense of community and commiseration.
What's the point?
That depends. Some vidders try to encourage people to share their ships ('shipping' is when a fan feels strongly about a romantic relationship between two characters, i.e. they 'ship them'). Other fans create fanworks because they love the original media and want to express it. Fandom often runs on a gift economy- which means that people create fanworks to be shared and enjoyed by the community. In turn, other fans repsond by making their own fanworks. It's a way of sharing and spreading enthusiasm for the original media.
Because these videos are so brief, they often rely on well-known media. That's why you end up hearing Frozen's Let It Go or the uber nostalgic Every Time We Touch by Cascada. Crack videos reaffirm what the fans already know about themselves. "I have this feeling about this character", it's a way if sharing a communal memory.
Videos often follow the same format. Currently, crack vids have been adopting a Robot Chicken syle sketch formula (they even feature a similar 'chanel change static' in between clips). This Supernatural video follows an older format, creating a music video for one song or idea. The song is usually a comedic choice, with scenes that correspond to the lyrics.
Sometimes videos use mashups to humorously criticize the characters we all enjoy. In this one, the vidder uses audio from popular tv shows, and lip synchs the audio with footage from BBC Sherlock. They chose to ssign Sherlock the lines from ornery characters, emphasizing his general miasma of distaste for other human beings.
Videos like this become especially popular during a tv hiatus. Fans thrive during these periods because they need to find ways to reconnect. It's a bit like live-tweeting a show, in that it gives people a way to feel like a part of something greater when they're enjoying media. It's harder to do somehing like that when a show is on hiatus. When there's no new content, fans create their own, so they can keep feeding their communiy. And because fans have been insular for a while, the content they create tends to get a bit weird. BBC Sherlock is known for having years-long hiatuses, so you'll end up finding plenty of crack in the fandom.
So crackvids are...
Absurd videos that reinforce a sense of community within a fandom. They're not meant to be taken seriously. They exist to make us laugh, and feel connected to the rest of the group though our shared interest and experiences. Most fandom functions in this way; because it runs in a gift economy, fans are creating and sharing constantly, because doing so means they end up getting something back in return.