Just jumping into the throng here because I can deeply relate to your problem, and in a slightly different manner is something I struggled with when applying to graduate school last year.

Some background: I am a doctoral student at a very good program (different field, but still). I had medical (not cancer) issues that bogged past as well. I actually dropped out of college with failed classes and resumed with a different major four years later. 

As other answers said - mention it in the personal statement, make it matter-of-fact. I woven it in a single paragraph that was structured somewhat like this: 

> I wanted to to X. Got sick. Tried my best but my medical issues got
> the best of me for a time. Worked hard to get better. Tried again
> because the time spent away enabled me to reassess priorities and my
> academic path shined through. Now I am better and very committed.

In my statement of purpose I decided not to mention any of this. So my advice: Write about it. Only in the personal statement. You don't even have to mention the specific issue (i.e., cancer) - especially if you are better now. It is nobody's beeswax at this stage.
When you do write about it (did I mention that you should write about it? ;)), frame it very carefully. **DO:** The single most important thing you can do is explain, briefly, how your experience made you realize what is important to you (i.e., graduate work). **DON'T** make this the only core point about who you are, and do not over sell how you overcame adversity - like everything in your statement (personal and research) - show is better than tell. It should be evident, not self-boasting.

Good luck!