Years ago I started setting up chroot access to limit visibility of file systems and some what increase security. Now we have products like Xen, http://xen.sf.net and linux vserver http://www.13thfloor.at/vserver/d_rel26/v2.1.0/
I have setup Xen and to me it looks very promising and plan to have my hosting setup converted from a chroot. Also with the price of virtual servers now, it will be more cost effective to purchase a virtual account rather then buy new hardware.
The cost of labour for the System Administration, Hardware Maintenance and collocation
is cumbersome. I want my business to focus on providing services for my customers rather then playing with hardware that will fail and need to be upgraded.
In the past people use terminals and would dail into a mainframe to use cpu time, now this computing model is coming back big time with the Internet and regular problems with windows maintenance.