Privilege separation is a technique to make the sshd service more secure. Privilege separation splits the sshd service in two computer processes, one process runs as "root" (SYSTEM) and the other process runs as a lower-privileged user account, typically this account is created as a user called "sshd".
This technique makes the pre-authentication attack on the system much harder.
See http://www.citi.umich.edu/u/provos/ssh/privsep.htmlThanks to Ron Dozier of University of Delaware for his suggestion.