you unlock your I pod but its not all to useful if you don't need it.
But if you jailbreak it you can do lots of funny things with it like using different interfaces getting rid of safari^^ and so on
Means you put firmware onto your iPod thats not made by apple. Jailbreaking it allows you to do many cool things such as putting cool themes on, run apps in the backround, get cool games, and many other things that apple does not let 3rd party app developers do.
It means you install hacked firmware on your IPOD thus voiding any warranty. Apple will not even repair it even if you are willing to pay. You could also brick your IPOD which means it will not work at all. I wouldn't do it.
