When you crush garlic it releases an enzyme, alliinase, that catalyzes the formation of allicin, which then breaks down to form a variety of healthful organosulfur compounds. Cutting it may help but is not as effective as crushing it.
Crushing garlic releasing useful substance has been known for some time, but a study lead by Claudio Galmarini and colleagues at the Institute of Nutrition and Technology of Foods in Argentina suggests crushing garlic before cooking can reduce the loss of garlic's healthful properties. They found that even a few minutes of cooking reduces the levels of the chemical compounds but reduction is steepest in whole garlic and less pronounced in garlic that has been crushed before cooking.
They postulated that crushing garlic before cooking probably allow alliinase to work before cooking inactivates the enzyme. Their report notes allowing crushed garlic to stand for 10 minutes before cooking may further enhance formation of those compounds before heat inactivates alliinase.
Source: Science Technology News: Scientists offer garlic cooking tips
Update 1 March 2007: I eat chopped raw garlic occassionally with my meal. I have insturcted the maid to crush the garlic before chopping it up. I now noticed a world of difference. Previously, I have to chew very well to get the "stinging" taste of raw garlic. Now, I hardly have to.