I had exactly the same question, having just heard of it today.
You can obviously find more information at http://www.cherokee-project.com/, but basically, it seems to be Apache as it started (sans feature bloat). It's written in C, requires no additional dependencies, and has what seems to be a very nice web administration panel.
Practically, it seems like its performance sits somewhere between Apache and Lighttpd, with Lighttpd beating it in performance, but (unless I'm mistaken) not on features.
edit: I would also love to hear more from somebody who has actually used it as to whether or not there are less apparent reasons to choose it, and whether or not it's ready for production use.
I recall reading that Apache is good for serving dynamic content and nginx is good for static. Where does Cherokee fit in?