"Unusual" means "outside of what is normal and acceptable." Prohibiting "unusual punishment" is simply stating that punishments must not exceed what are accepted to be subjectively normal and usual standards. So we can't punish someone by, say, forcing him to keep a half dozen live chickens in his bedroom. Because while it's not terribly cruel (at least not to the man), it's certainly unusual and doesn't fall within reasonable standards for criminal punishment. It might also be considered degrading, and that's exactly what the framers of the Constitution were trying to avoid: degradation or extreme severity in punishment meted out by the courts.

You can read a lot more about this piece of the Constitution here. Regarding what is "unusual," this section is of interest:

... there is a large gray area, in which "cruel and unusual" is definitely subjective based on individual sensitivities and moral outlook. The U. S. Supreme Court waffled on the death penalty, declaring that some forms of the penalty were cruel and prohibited under the Furman case (1972), which halted executions for several years, but later relaxed the prohibition. The question remains if the gas chamber, hanging, or electrocution are cruel and unusual. Cruel, certainly, but hanging was not unusual at the time the Bill of Rights was adopted.