A very nice tip from *nix expert littleman. Heres what it does:

It is just a way of turning off the ping response, but it is an essential step if you want to keep your *task* server hidden. Doing such a thing on a public web server would be nearly meaningless because all one would have to do is make requests to standard ports and see if anything happened.

Yet, if you have a server which you don't want to be probed and prodded this could be one of several steps to keep the less sophisticated off you back. If you have a server which requires network access you can't hide it 100%, but most people only know about 10% of the ways to snoop around.