yes thats what it means you can run this distros chrooted into maemo. there are some advantages and disadvantages.

Advantages
you don't need to reboot the device
you can run various distros at same time
you can use the features of maemo in this distros
you dont need a sd card
if you want you can use just a terminal or the graphical user interface
you don't have to compile or patch the kernel

disadvantages
the system could run a little more slowly (for me the performance are acceptable) but that depends on the distro