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The switch causes the CPU to start back at the beginning of its instructions as if it had just been turned on. This can take it out of a condition where it is stuck in an endless loop. Reset is good when your computer is frozen and there is nothing you can do. When you reset the computer, it re-sets the functioning , i.e. the computer starts as if its being started again. There may be some data loss if the data you were working on was not saved by the operating system / user. In addition, it may cause some file system corruption on the hard drive.

The key about losing data, though is that only data since the last save will be lost. As the system will reset, anything that was stored in RAM will be erased. Thus all recent changes will be lost. It does not mess your computer up, but causes the CPU to start back at the beginning of its instructions.

(Technically, the RAM is not erased on Reset. In fact, all "Reset" does is indeed re-set the instruction pointer. The RAM stays as is until overwritten by other data (thus enabling an attack on its content if anyone were so inclined).)

The danger is that most modern filesystems (starting with MS-DOS 4.01 in 1988) cache data intended to be written to the hard drive. This makes file IO transfer faster, as the cache resides in memory. The computer updates the cache in RAM, and then transfers cache data to the hard drive at a later time. When the system is "hard-booted" by power loss or triggering the reset button, the data in the cache is lost. This can cause file corruption and data loss as the files may be on the hard drive in a semi-updated state.

Modern filesystems (ext3, NTFS, Rieser fs) journal data on the hard drive. This slows data writes slightly, but it prevents semi-update file corruption -- the journaling system updates files "atomically" in an all-or-nothing way.

Using the reset button can often fix many problems, but not all. Some settings in the hardware will not get reset by using the reset switch. A hung floppy drive or hung sound card may continue to be hung after a reset. Only completely powering down the computer and restarting it will reset all devices back to their initial state. If using the reset button does not work, then try powering down the computer and turning it back on again.

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Q: What happens when you use the reset button on a computer?
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