The basic idea behind a honeypot is easy. Build a system which looks like a production system, but it easier to break into (though the goal is that it isn’t easier to break into). You setup an isolated network segment, throw a web server in there with a couple of holes in the firewall and wait for the attackers to start looking for it.
The concept is to attract the bad guys to these systems, that no one would ever have any reason to connect to so that you can see what they are doing without the white noise of actual business showing up in the real systems logs. Basically, the though process is to be able to figure out what they are going to do to your system— before they do it so you can head them off and put security in place to prevent it happening for real.
There are many linux honey pot projects out there– most can make the system look like any system you prefer. Search for honeynet or Linux honeypot project and you’ll be able to find more information.
If you’re not familiar with Linux there are a couple VMware virtual appliances that may make it a bit easier here.