Kara canceling is simply canceling the starting frames of a move to move across the screen quicker, or extend range of a special attack.
Look at jacquis f3 for example. You can cancel the run animation of the attack into an overhead or low. Essentially what you are doing is "kara canceling" that attack.
The most popular application is in street fighter, with characters that have kara throws or kara uppercuts.
What
@Nivek means when he says "kara-uppercut" is simply an attack that moves raiden forward as he is anti airing. It's not literal kara attack, but it does move him forward.
Hope this helps!!