Social Engineering is a term that basically means "talking someone into something." It's not hacking or cheating, though it's often used in conjunction with such activities. Successful confidence men and used car salesmen are consummate social engineers. So are successful cheaters in online games, since the trick of succeeding at that venture isn't to find the hacks, it's to get other people to let you use them. Or to try to use them themselves, thus falling victim to a key logger or item dropper or other such malicious program.
There are countless social engineering scams, most of them Battle.net adaptions of classic "grifts." The vast majority of these involve ways to (supposedly) get rich quick by duping items, hacking items, creating special item types, boosting your character's level or powers, etc.
The old saying amongst con men holds very true on Battle.net, "You can't cheat and honest man."
One Example
A very common type of social engineering is a two man confidence game. One player starts this in a public game. He'll claim to have an amazing ability; a way to dupe items, or hack them to increase their stats, or something else desirable. Naturally no one in the game believes him, and the wiser players simply squelch him. His (secret) partner (the shill) is the most vocal in his disbelief, they appear to argue, and finally the skeptic throws up an item to be duped or otherwise manipulated, "Just to shut him up."
Imagine the skeptic's surprise when he receives back two of the items, or the item much improved! He exclaims in amazement, then quickly throws in more items to undergo this transformation, loudly singing their praises to everyone in the game. If anyone else there is gullible enough to fall for this act, they'll offer up their own item(s) to be improved or duped... at which point both players vanish from the game, taking the spoils with them. This basic scam has been used in countless ways on Battle.net, often in combination with duping tricks, or fake item display tricks, etc. Anything to make the con more believable.
Alternatively, and more dangerously, the original huckster isn't offering a simple item upgrade, but is claiming that he's got access to a program that will do amazing things. The second player is skeptical, but after a delay to apparently install it, he claims it works wonderfully. This is obviously meant to get other players to download it, and give themselves a virus, or a backdoor key logger, etc.
Never assume other players aren't secretly working together, and never believe anything that seems too good to be true.