As I strongly implied, type 1 hypervisors are more secure, not less, than type 2. Try at least reading the parent post before lapsing into your "no, no, no..." mantra. Implying that type 2 is more secure is absurd.
If you haven't already stopped reading (again), you might want to read this: http://blog.invisiblethings.or...
In short, a jailed process on a host system still has a very complex, privileged kernel to try and exploit. But in a Xen guest VM, its only the complexity of the hypervisor interfaces that matter since the kernel is unprivileged and must go through the same interfaces to attempt an attack on anything else in the system.
Here's another way to think about it: BSD security literature relies heavily on jails. But what proportion of BSD-based applications are running in BSDs that are merely virtualized guests?
Finally, how do jails deal with attacks on firmware or misbehaving hardware? That I'm aware of, using an IOMMU to assign a (real) NIC on a PCI bus to a jail is not possible, and would be pointless if it were. But with hypervisors like Xen on hardware that supports IOMMU, assigning hardware devices to guest VMs is a feasible way to increase security that is growing in popularity.