Last night while working on a new cupcake (I'll share shortly), I was asked "what is cake flour?"
Um?! I don't really know. I know Alton Brown has a pretty good explanation but I don't recall. So on the google search I went...
According to WiseGeek, Cake Flour "is made from the endosperm of soft wheat. The endosperm is the softest part of the wheat kernel, making cake flour the finest flour available. As cake flour is milled, it is heavily bleached, not only to make it white but to break down the protein in the flour. Typically, cake flour is around seven percent protein, much lower than other flours; bread flour, for example, has twice that amount of protein.
The delicate, fine texture of cake flour is accomplished by heavy milling. The fine grain absorbs fat readily, ensuring that butter and other fats in cakes are well distributed throughout the batter. Cake flour can also carry a high volume of sugar when compared to higher protein flours. Since cake flour is a high-starch flour, it is extremely well suited for certain baking tasks. Cake flour is also lighter than conventional flour, which is why the substitution above falls short of a full cup."
So in basic english, Cake flour has a less protein, finer grain and a lighter, fluffier finish.
As a good rule of thumb, don't use Cake flour for breads or too many savory items, but do use it for cookies, cakes and of course, cupcakes!