How to Restrict users in thier home directory?

Problem:
Traditionally, the best way to "lock down" users to their home directory is to use a "change rooted environment". However, this is expensive (resource wise) and sometimes not a very "nice" way to secure a server on a user per user basis.
For V-hosters, most of your concern lies in the simple feat of keeping customers from poking around your system, and other user's home dirs--without limiting their ability to execute binaries in their normal system path.

Solution:
To set up your system to use it... just do this:


chmod 700 /home -R

Not sure about that though. you might want a second oppinion.'Edit: That will work for home directory, as for system files I dont think that will work since many things have to be readable to work