Keyguard basically refers to the code that handles the unlocking of the phone. it's like the keypad lock on your nokia phone a few years back just with the utility on a touchscreen.
you can find more info it you look in android/app or com\android\internal\policy\impl
The lock screen works without keyguard i have tested it. The home button stops working and you can't get to task manager by holding the home key. I wish they didn't develop a new process when it used to be built into system ui or whatever. I don't see the need for the change and extra process
Yes, I also found it here:
http://developer.android.com/tools/testing/activity_testing.html
It's seems a key-input protection mechanism which includes the screen-lock, but not only includes it.
According to this webpage, it also defines some key-input restriction for auto-test framework in Android.