What does "Jewels" means in a mechanical watch?

Partial answer from Wikipedia:

The movement of a chronograph pocketwatch from the 1880s.

Jewel bearings were invented and introduced in watches by Nicolas Fatio (or Facio) de Duillier and Pierre and Jacob Debaufre around 1702 to reduce friction. They did not become widely used until the mid 19th century. Until the 20th century they were ground from tiny pieces of natural gems. Watches often had garnet, quartz, or even glass jewels; only top quality watches used sapphire, ruby, or diamond. In 1902, a process to grow artificial sapphire crystals was invented, making jewels much cheaper. Jewels in modern watches are all synthetic sapphire or (usually) ruby, made of corundum (Al2O3), one of the hardest substances known. The only difference between sapphire and ruby is that different impurities have been added to change the color; there is no difference in their properties as a bearing. The advantage of using jewels is that their ultrahard slick surface has a lower coefficient of friction with metal. The static coefficient of friction of steel-on-steel is 0.58, while that of sapphire-on-steel is 0.10-0.15.



Why they are used

Jewels serve two purposes in a watch. First, reduced friction can increase accuracy. Friction in the wheel train bearings and the escapement causes slight variations in the impulses applied to the balance wheel, causing variations in the rate of timekeeping. The low, predictable friction of jewel surfaces reduces these variations. Second, they can increase the life of the bearings. In unjeweled bearings, the pivots of the watch's wheels rotate in holes in the plates supporting the movement. The sideways force applied by the driving gear causes more pressure and friction on one side of the hole. In some of the wheels, the rotating shaft can eventually wear away the hole until it is oval shaped, and the watch stops.

http://en.wikipedia.org/wiki/Mechanical_watch