The contentbase parameter allows you to fix the location of where Twonky scans for media on your system. The benefits are a much easier to organize sever, and less chance for Twonky file scanner accidentally trying to scan filesystem files and much shorter scan times.
Suppose you have the following:
/usr/... /bin/.. /mnt/media/music/.. /mnt/media/video/.. /mnt/media/pictures/.. /lib/...
In this scenario without setting a contentbase, you would have to specify the full path to the media (/mnt/media/music). if you don't supply the full path, or someone comes along and messes with the sharing settings or you are still using the default: / you will be scanning the entire system for media including the system areas.
A better solution would be to set the contentbase to /mnt/media/
In the web interface you would then only need to specify music/ video/ pictures/ for the content directories. There would be no way the scanner could navigavte outside these areas.
NOTE: After changing contentbase, it's recommended to do a full database rebuild.