What exactly is jailbreaking an iPod?

I’ve heard a ton of people talk about “jailbreaking” their iPods. What are they doing when they are talking about “jailbreaking”?

Don’t worry, mother. If it’s something bad, I won’t go doing it. I always have to put disclaimers on these kinds of things.

What would happen to your iPod if you jailbroke it? What is different about it? etc. Thanks!