How bad is cracking knuckles and back?

Depends: It depends on who's doing it and why. If you're doing it as a nervous habit, then it's likely not doing you any good. If it's a do (or even a chiropractor) doing it to treat a specific problem, then it can be a good thing. Think of it like a pill. The right pill for the right thing can be good while the same pill for the wrong thing can be bad.