There is some information on this in the Help section. Reserve bids are used to encourage bidding. They are to remain a secret until someone meets them. Otherwise someone would just say no reserve and set the minimum bid to act as the reserve.
Bottom line is that there are many strategies in auctioning one's stuff.
Both ways are accepted in all auctions online that I've seen. The key is to bid what you think is fair. Reserve bids are used to encourage bidding. They are to remain a secret until someone meets them. Otherwise someone would just say no reserve and set the minimum bid to act as the reserve.