This is still technically a virtualization technique, known as "operating system-level virtualization".
http://en.wikipedia.org/wiki/Operating_system-level_virtuali...Here are some of the technologies explained:
cgroups: Linux kernel feature that allows resource limiting and metering, as well as process isolation. The process isolation, also called namespaces, is important because it prevents a process from seeing or terminating other running processes.
lxc: this is a utility that glues together cgroups and chroots to provide virtualization. It helps you easily setup a guest OS by downloading your favorite distro and unpacking it (kind of like debootstrap). It can then "boot" the guest OS by starting it's "init" process. The init process runs in its own namespace, inside a chroot. This is why they call LXC a chroot on steroids. It does everything that chroot does, with full process isolation and metering.
aufs: this is sometimes called a "stacked" file system. It allows you to mount one file system on top of another. Why is this important? Because if you are managing a large number of virtual machines, each one with 1GB+ OS, it uses a lot of disk space. Also, the slowest part of creating a new container is copying the distro (can take up to 30 seconds). Using something like AUFS gives you much better performance.
So what about security? Well, like every (relatively) new technology LXC has its issues. If you use Ubuntu 12.04 they provide a set of Apparmor scripts to mitigate known security risks (like disabling reboot or shutdown commands inside containers, and write access to the /sys filesystem).