So just how hardy is your character? How much endurance does he/she have? These questions are what Reserve answers. Reserve is, more simply put, a measure of your character's pacing in battle. That is, how quickly they're likely to tire out when fighting at full tilt. Your remaining reserve is responsible, therefore, for how 'worn out' your character is looking at any point in time.
You will see Reserve as a percentage total and it's one of the two stats not directly controlled by an appropriate application. Reserve is more derived from a cross-section of all the stats for your character, including Reflex. This cross section is used to figure your character's base reserve. Then, your character's attacks will have a reserve cost figured for them, which you also see as a percentage total. This cost is based on a number of factors, including the offensive stat used by the attack, the attack's total point cost and any flags that happen to be on the attack. However, extra points added onto the attack by flags such as EM1 and EM2, are not counted in most, but /not all/ cases. Attacks that have more than one type are also subject to higher reserve costs.
This can all be unified into one blanket assumption: With offensive orientation comes heavier reserve use. To illustrate, a character that consistently uses Chi Projectile attacks with a 50 Chi stat is going to use a lot of Reserve quickly and will run out if all of their defensive stats are in the area of 20. Conversely, with defensive orientation comes lighter reserve use. A character with obvious overall defensive leanings will in turn have more reserve to work with. All things considered, it is often best to maintain a balance between offense and defense in your stats--this will ultimately offer you the best rate between actual power behind your attacks and the total number of attacks you can use.