I have used reserve on some of my auction items in the past. Using the above example of $200 if I felt the item was worth 200 or more or it cost me 200 and I just wanted to off load it there would be a $200 reserve. However I am hoping that someone out there thinks it is worth far more that 200... and bids it up to say $400 the price they felt it was worth to them.
This way I make out a lot better than just listing it for $200. And if no one offers close I do not have to sell at a loss.