To be honest with you, there are so many questions that are posted that could be answered by referring the poster to the PHP manual, that sometimes, I don't really investigate the contents of that page myself before replying to the poster with the link. This is especially the case when it comes to PHP functions.
Anyway, my bad for sending you there without looking.
I did visit it myself after you posted again and you're right, for once the PHP manual is sparse in its explanation. So what does one try next? Well, an O'Reilly publication, of course. ;-)
The following comes form page 292 of "Programming PHP" by Rasmus Lerforf:
"Many ISPs have scripts from several users running on one web server. Since all the users who share such a server run their PHP scripts as the same user, one script can read another's data files. Safe mode is an attempt to address this and other problems caused by shared servers. If you're not sharing your server with other users that you don't trust, you don't need to worry about safe mode at all."
And to keep myself from being sued for typing that, I will provide a link to Amazon. ;-) (I will leave the open_basedir question for someone else to answer).
http://www.amazon.com/exec/obidos/tg/detail/-/1565926102/qid=1086499878/sr=8-1/ref=sr_8_xs_ap_i1_xgl14/104-5220189-9075163?v=glance&s=books&n=507846