Reserve prices guarantee the item won't sell until that price is met.
HOWEVER, it deters many, many buyers since they don't like playing the seller's guessing game...
It usually is pretty expensive when compared to other fees.
If it doesn't sell, then I think you'll have to relist it. If it sells then, your relisted insertion fees are refunded, making it so you really only paid the first time - the second fees were refunded upon an item's successful sale.
Though I could use confirmation on that from someone else? I know the reserve is a huge turnoff. I usually set my prices around what I expect them to sell and I haven't had any problems and I've been happy with what they sold at.