When a production company decides to create a movie, they have to hire people to cast into the roles. Casting agents will audition actors based on their acting ability, look and interaction with others. Sometimes movies are made with the lead role already cast; casting directors are only looking to fill in the other roles. Other movies may emphasize the story and production and not who is playing the lead role. These types of movies are the ones where cameo appearances are more frequent.
A cameo happens when someone has a very small role in a movie with little to no lines but his appearance has special attention drawn to it. Cameo roles usually go to someone famous or known in one way or another. The cameo may sometimes be a very pivotal point of the movie that moves the story along. Usually when someone makes a cameo appearance, they aren't heard of or seen in the movie again.
Famous actors have made numerous cameo appearances in big and not-so-big budget films. Sometimes the actors are associated with the movie's production or financing, so they use their star power and word-of-mouth cameo appearance to drive up publicity. They will often go uncredited to keep the element of surprise. California governor Arnold Schwarzenegger appears in the action movie "The Rundown." He briefly passing by the star, Dwayne "The Rock" Johnson, in a nightclub scene and tells him to "have fun." This cameo has been described by the movie's director as a passing of the torch between Schwarzenegger's movie roles as an action hero to The Rock.
Sometimes the directors themselves will appear in movies. Alfred Hitchcock, the famous director of "The Birds" and other suspense movies, showed up in 37 of his works. Quentin Tarantino makes a brief appearance in "Pulp Fiction" as Jimmy Dimmick, a friend who helps the lead characters dispose of a body. Stan Lee has appeared in all the "Spiderman" movies and also Ang Lee's "Hulk" where he plays a security cop alongside the original television Hulk, Lou Ferrigno. M. Night Shamalayan casts himself frequently in his own movies. He appeared as a sheriff in "The Village" but could only be seen in the reflection of a mirror.
Occasionally other people in the sports or entertainment world will show up in a movie. Sean "P Diddy" Combs played the soon-to-be executed husband of Halle Berry's Leticia Musgrove in "Monster's Ball." Some will play themselves, like Donald Trump did in the movie "Zoolander". Will Smith played the role of Chris Gardner in the true story movie "The Pursuit of Happyness," and Chris Gardner himself appeared very briefly at the end of the movie.