What does Security-enhanced Linux give me that standard Linux can’t?
The Security-enhanced Linux kernel enforces mandatory access control policies that confine user programs and system servers to the minimum amount of privilege they require to do their jobs. When confined in this way, the ability of these user programs and system daemons to cause harm when compromised (via buffer overflows or misconfigurations, for example) is reduced or eliminated. This confinement mechanism operates independently of the traditional Linux access control mechanisms. It has no concept of a “root” super-user, and does not share the well-known shortcomings of the traditional Linux security mechanisms (such as a dependence on setuid/setgid binaries).
The security of an unmodified Linux system depends on the correctness of the kernel, all the privileged applications, and each of their configurations. A problem in any one of these areas may allow the compromise of the entire system. In contrast, the security of a modified system based on the Security-enhanced Linux kernel depends primarily on the correctness of the kernel and its security policy configuration. While problems with the correctness or configuration of applications may allow the limited compromise of individual user programs and system daemons, they do not pose a threat to the security of other user programs and system daemons or to the security of the system as a whole.
Source: NSA: SELinux Frequently Asked Questions