Historians are somewhat divided on just what or to whom Chrestus refers—though its usually accepted that the " Jews" being referred to are Christians—in Gaius Suetonius Tranquillus' De vita Caesarum (Lives of the Caesars, often known as The Twelve Caesars). Many, particularly apologists, opt for a misspelling of the name Christus, meaning Christ. But judging from the evidence, there is some question about this.
According to the text: "because the Jews at Rome caused continuous disturbances at the instigation of Chrestus, he expelled them from the city." "He" is Emperor Claudius. He came to power in 41 AD. If this "instigator" is to be identified as Jesus ("Christ"), then either Suetonius has an incorrect date or the generally accepted date of the crucifixion (around 30 AD) is wrong.
Now it is possible that it refers to the doctrines of the man/religion, rather than the man, himself. It has been offered that it was a misunderstanding of the biographer, who had inadequate knowledge of the religion beyond it being about a certain person. It might be about various debates among the early Christians about the messiah, since much of Christian doctrine (coming from the collected Pauline epistles) had yet to written—the first usually being dated no earlier than 48 AD, the expulsion taking place around 49 AD. That the action was taken against the whole community instead of a single person might suggest this. (*) Or merely the arrival of Christianity in Rome which could have caused friction between the inhabitants and the converts.
There is also the possibility that it refers to another self-proclaimed messiah of the time (the sort of thing that would instigate the early Christian community). Though there is no current evidence to support this beyond its being possible, but both Judaism and Christianity have had their share of people claiming to be the " anointed one" both before and after Jesus. It should be remembered that "Christ" is a title (as in "Jesus the Christ"), not a family or personal name. It comes from the Greek Christos, meaning "anointed one" which is what the word messiah (Mashiach or Moshiach) means in Hebrew.
Of course, another thing that calls the designation into question is the fact that it was a fairly common Greek name, particularly among slaves and freedmen. That furthers the proposition that it refers to a person but not Jesus (whether in a literal or abstract way). Again, there is no hard evidence for this reading but its plausibility seems to make a stronger case over a misspelling (deliberate or accidental) by Suetonius.
According to the Catholic Encyclopedia, many early Christians may have taken to calling themselves "Chrestus" in honor of Jesus (or his teachings) making the altered spelling deliberate but not on the part of the Romans—further suggesting that it may have been the Christians weaker understanding of the concept of "anointing" that led them to choose the other term because it meant "good" or "excellent." It also claims the Suetonius use as being a typical example of pagans who "made little or no effort to learn anything accurate about Christ and the Christians." So if it is a matter of misspelling, then it may due to ignorance rather than intention (according to the source).
Further complicating things is that Suetonius wrote The Twelve Caesars around 110-120 AD so it is difficult to know how reliable some of his sources are 60-70 years later (though he did have access to the imperial archives). Further, he is known for filling his biographies with plenty of rumor and scandal, as well as personal bias. Not to say nothing is reliable but that it's a bit too easy to assert a claim such as Chrestus=Christ when the evidence for that claim is rather speculative either way.
Another note: often the line from Suetonius is used as an example from a pagan (i.e., non-Christian) source proving the historicity (or even "Son of God"/messiah aspect) of the man called Jesus. As in most cases, this is incorrect, as it can do nothing other than prove the existence of Christians and who believed there to be such a person (divinity, included). This isn't to say that there categorically wasn't, only that as evidence for such, this is rather weak.
(Sources: Suetonius The Twelve Caesars, www.newadvent.org, www.britannica.com, numerous other sites and books, * http://religion.rutgers.edu/iho/jesus.html)