Terminal velocity, a rather chilling term, describes the velocity at which drag force from the air becomes equal to the force from the weight of an object, and thus the object no longer accelerates and velocity remains constant. The greater an objects cross-sectional area and the less its mass, the lower the terminal velocity and the sooner its reached. A cat reaches its terminal velocity of 60 mph within 5 stories of freefall. For comparison, a person's terminal velocity is 120 mph. Once a cat reaches its terminal velocity, it then begins to slow down. Our bodies are only sensitive to acceleration (this is why at times in an airplane flight it feels as if you aren't moving at all). When the cat reaches terminal velocity, it relaxes to resemble a spread eagle cat as oppossed to its earlier position with legs pulled tightly under its body, back arched, and head down. This increases its cross-sectional area and slows the cat down. Relaxing also causes the impact force to be spread out over more area when the cat lands.
**This graph is taken from "How Cats Survive Falls from New York Skyscrapers." It plots the percentage of adult humans or cats killed by a fall versus the stories fallen. The adult human graph increases steadily to 100% while the cat graph increases to about 10% and then decreases to about 5% for falls from 7 to 32 stories.
Not only do cats seem to understand how increasing their area can lead to a less painful landing, they also seem to be well acquainted with the conservation of angular momentum, which they artfully use to land on their feet time and time again.