The reset button forces the processor to re-initialize just like a cold boot, but without the power shock/surges associated with a power cycle using the on/off switch.
Most ATX motherboards are never completely "off," even when switched off with the power button. Some power is still fed to the motherboard, slots, processor, and RAM for features like Wake-on-(LAN, MODEM, Key press).
That's why it's important to unplug the system, or use the power switch on the power supply to completely kill power to the motherboard before adding/moving/changing cards on the PCI bus, or adding/moving/changing RAM. Failure to do so may cost you components.
FWIW
Scott