What is preemption / What is a preemtible kernel? What is it good for?

Preemptive multitasking - Running several processes/threads on a single processor, creating the illusion that they run concurrently when actually each is allocated small multiplexed time slices to run in. A process is "preempted" when it is scheduled out of execution and waits for the next time slice to run in.

A preemptive kernel is one that can be interrupted in the middle of executing code - for instance in response for a system call - to do other things and run other threads, possibly those that are not in the kernel.

The main advantage of a preemptive kernel is that sys-calls do not block the entire system. If a sys-call takes a long time to finish then it doesn't mean the kernel can't do anything else in this time.The main disadvantage is that this introduces more complexity to the kernel code, having to handle more end-cases, perform more fine grained locking or use lock-less structures and algorithms.

You should really use the term "preemptive." There are different kinds of preemption. Essentially, it is very simple and you probably understand this by another name. A preemptive operating system can switch contexts between user mode threads without any special programming in the preempted application. This allows for multitasking. An OS can switch away and back to a process and this switching is essentially trasnparent. There is also such a thing as preemptive kernel, which allows kernel mode threads to be preempted (most operating systems do not allow this but it is required for certain applications such as in real time systems). Note, this is a very simplified explanation.

Others have adequately explained what a preemptible kernel is.

What is it good for?

Mostly the benefits are:

• Lower latency on non-SMP systems - typically used in realtime systems or for other things where latency is important (audio, video apps perhaps)
• Teaching kernel developers who don't have SMP systems how to write correct code for SMP

With a non-preemptible kernel, on a single processor system it is possible for kernel developers to be lazy and get away without any locking most of the time - of course this is a big FAIL on SMP. Preemptible kernels allow them to get this pain without more cores.