Basically, without getting too complicated, it's just your first line of defense. A VERY IMPORTANT first line of defense.
Check out this thread that was just posted by Dis:
http://www.silkroadforums.com/viewtopic.php?t=48072
That's how much of a different jewelry makes. So make sure that you have it, and you have good jewelry.
Also, you can add things such as STR / INT bonuses to your jewelry, and with it, you can become immune to certain things (at the current Cap), such as Ice. Once again, at the CURRENT CAP, no jewelry = no ice immunity.