The cry_rounds is the number of rounds used for hashing the password (together with salt).
The general wallet encryption algorithm is described here: https://en.bitcoin.it/wiki/Wallet_encryption:
"Wallet encryption uses AES-256-CBC to encrypt only the private keys that are held in a wallet. The keys are encrypted with a master key which is entirely random. This master key is then encrypted with AES-256-CBC with a key derived from the passphrase using SHA-512 and OpenSSL's EVP_BytesToKey and a dynamic number of rounds determined by the speed of the machine which does the initial encryption"
So, the more cry_rounds you have - the more sha512 rounds you should perform while decryption the password (also, the better computer you use for wallet.dat encryption, the more cry_rounds you will have).
In general, the encryption process could be represented as following:
for i in range(rounds):
data = sha512(data)
key = data[0:32]
iv = data[32:32+16]
dec = AES(key, CBC_MODE, iv).decrypt(cry_master)