A braking system found mostly in Long duration transport Tractors ("Big Rigs" or "18-wheelers") as a supplement to the conventional braking system.
It is commonly known as an "Engine Brake" or the longer "compression release engine braking systems", though the most common term is a "Jake Brake" because first company to market it was Jacobs Vehicle Systems. The first Patent covering this technology is 3,220,392, filed by one Mr. Cummins, of Cummins Diesel fame.
The idea is very simple -- Let the compression in the cylinders slow the vehicle down. If you've driven a car with a manual transmission and have used downshifting to provide braking, you've seen the basic concept in action. However, the "Jake Brake" system goes further than this and instead actually turns the engine into an air compressor of sorts to provide a huge amount of additional braking power.
If you are familiar with the concepts of Internal Combustion Engines, you know that a 4-cycle engine has what's called a "compression stroke". Compressing the air and gasses in the cylinder takes power. If the tractors' engine's drive shaft is turning the engine to brake the truck, the power used to compress the air is braking power. In normal cases, however, power that is stored in the cylinder and simply lost as the compressed air simply pushes the piston back down, and so you don't really get any additional braking from an unmodified engine.
The addition of a "Jake Brake" modifies the timing on engine's exhaust valves so that, when additional braking is desired, the exhaust valves open as the piston reaches the height of the compression stroke. The energy gathered in the compressed air is then released, so the compression stroke then provides braking power.
Jake Brakes are used because they remove a considerable amount of wear from the brake pads especially considering that, to slow down a huge Tractor-Trailer, you have to 'ride the brake' for a considerable distance compared to a regular passenger automobile. The downside is that in releasing the compressed air, a major amount of noise is emitted, which would explain some signs seen on North American roadways that read "Use of Engine Brakes Restricted next xxxx yards".
Sources: howstuffworks.com
my Dad, a trucker | 
