What does "17 jewels" mean?
Higher grade watches have traditionally used a jeweled movements, which means that jewels (originally natural ruby, now synthetic ruby) were actually used in the movement. These jewels are functional - they are used as the bearings for the wheel trains and in high wear parts such as the escape lever and impulse jewel.
A lower-end movement from before 1970 would typically use 5 or 7 jewels; this end of the market has pretty much been taken over by quartz. Nowadays, most manual wind watches will have a standard complement of 17 jewels, which are:
1: Impulse jewel (the part of the balance wheel assembly which receives a kick from the escape lever)
2-5: Balance staff pivot bearings (two pairs - in combinations of one pivot jewel (i.e. jewel with a hole to receive the axle (pivot) of the wheel) and one cap jewel (i.e. jewel without a hole outboard of the pivot jewel, to prevent excessive movement of the balance staff), usually shock protected)
6-7: Escape lever pallets (one pair)
8-9: Escape lever pivot bearings (one pair)
10-11: Escape wheel pivot bearings (one pair)
12-13: Fourth wheel pivot bearings (one pair)
14-15: Third wheel pivot bearings (one pair)
16-17: Center wheel pivot bearings (one pair)
Note that automatic winding movements, and movements with additional functions such as chronographs and calendars, can up the total number of jewels tremendously. For example, the IWC Il Destriero Scafusia (claimed to be among the most complicated wristwatches manufactured) had a total of 76 jewels to accommodate the time, perpetual calendar, rattrapante chronograph, repeater, and tourbillon functions - and this is a manual wind watch.
(used with permission of TimeZone)