The cradle adapts the tube to the mount - it firmly holds the round tube and provides flat, square surfaces to attach the altitude bearings to the side. Often a handle is attached to the top of the cradle to make carrying the tube and cradle more convenient. A cradle must be sized to the snuggly fit the outside diameter of your telescope tube.
The length of the cradle (length along the tube) should scale with the size of the telescope. A good rule of thumb is to make the cradle about twice the diameter of the primary mirror: This makes a 6 inch scope cradle one foot long and an 8 inch scope cradle 16 inches long. For 10 inch mirrors and above, this rule may make the cradles a bit too long. You want the cradle to be long enough to attach your altitude bearings, so you might want to read ahead, figure out the altitude bearing diameter you will use, and scale the cradle to them (remember that the altitude bearings will be attached at an angle, so the cradle length can be somewhat smaller than the bearing diameter). This is not a critical dimension, you can certainly adjust it to your taste.
The simplest cradle to build is a box cradle. Consisting of four pieces of plywood sized to snuggly fit the outside diameter of your tube, it is glued and screwed together at the edges. Some versions use ¾ x ¾ inch lengths of wood on the inside corners of the box to reinforce the joints; you can screw the box together on the inside for the top and sizes to hide the screw heads (and from the bottom on bottom side, which is not very visible).
While simple to make, a box cradle does not allow for adjustment of the tube within the cradle. This means that the angle of the eyepiece is fixed (usually set at about a 45° angle) and balance of the tube in the cradle cannot be easily adjusted. With very little additional work, we can build an adjustable cradle, which is the cradle we will build.
See also our Anatomy of a Dobsonian which has a simple box cradle.