Usually translated lovingkindness, or faithfulness, it has the idea of friendship, loyalty, blessing and love. It is most used to describe God's covenant love. Here in Ruth, everyone is showing hesed to each other. This is in stark contrast to the way most of Israel were acting at the time. If you turn back 3 pages to Judges 19, you'll see what I mean.
Judges is full of awful stories about attrocities every bit as bad as what's happening in Bosnia.
In fact that's not a bad comparison. Israel at the time of Ruth was a lawless, bloodthirsty land. When we realise that, we see how different Naomi and Ruth are, and also Boaz whom we meet in chapter 2. Well, Elimelech and his family were ordinary people from Bethlehem in Judah. This Bethlehem, though an insignificant town, was to play a vital role in the history of salvation.