Linux.com: SSH Jail
Jailing is a mechanism to virtually change a system’s root directory. By employing this method, administrators can isolate services so that they cannot access the real filesystem structure. You should run unsecured and sensitive network services in a chroot jail, because if a hacker can break into a vulnerable service he could exploit your whole system. If a service is jailed, the intruder will be able to see only what you want him to see — that is, nothing useful.