I use a refugium for several reasons:
1-additional water volume(the more water volume the more stable the system)
2-refuge for micro infauna such as copepods...isopods...amphipods...mine even has mysis shrimp thriving.All of which can become a natural food source for the fish and corals in the display.
3-macro algaes for comsumption and removal of excess nutrients...macro algaes are basically larger types of algaes such as caulperas which can compete for nutrients with micro algaes(smaller algaes)
4-refugiums can in general add to the filtration abilities of a well balanced system
kip- that's a great use for the fuge that i have yet to hear! no corals yet but someday i'll use that tip.
i love my fuge (even though its a rubbermaid and hard to see anything inside it). i've had my tank up for about 4 months now and, since its cycled after the 1st month, trates have been zero! i do WCs anyway. but i love the zero trates. i have pods, LR, DSB, and a whole lot of chaeto in it.