Smartreflex is a technology from TI to reduce power consumption.
Try google, it is explained really clear on the website of TI.
The problem with SR is that it only works with frequencies up to 805MHz, when you go higher (i.e. 850 or above) your phone will probably reboot due to a watchdogtimer-timeout. Not really dangerous, but it isn't handy either.

And about the WLAN power consumption: i have noticed that my ping's are faster on the medium powersave, so for me, it is faster this way. I don't know why, but its what I experienced.