Mine consists of an overflow box in my main tank, that drops to the ref. tank below (20gal). Then a pump that pumps the water back to the main tank.
The reason i'm adding one.
1. growing macroalgae which can overwhelm your main tank. The macroalgae take nitrates out of the water, it also can be used as food for fish in main tank.
2. Pods will live much better in a refugium, since there are no predators there. Some of them will take the pump-ride to the main tank.
3. More water is always better. Bigger tanks are more stable then smaller tanks, by adding a refugium, you are in essense making your tank bigger. When things go wrong, they will happen much slower
4. Getting eyesores out of main tank. Filter, heater, therm, etc. can all be placed in your refegium. The only thing I have in my main tank that is manmade is the overflow box.