The pill is the driver circuit and the LED. When they develope a newer circuit, or upgrade an existing circuit with a more efficient (brighter) LED, you can choose to buy just the pill and replace the one in your light. It is as easy as unscrewing the front of the light, unscrewing the pill, and scewing in the new pill, and screwing the light back together. You could buy a new pill a month after getting the light, or you could wait 6 months, a year, it's up to you. Rather than buying another new light in 6 months for $100-150 because it's brighter than your DBS, you can just buy a new pill for $30 or whatever and have the latest and greatest emitter.
The OP reflector is an orange peel or textured reflector. This will reduce the DBS's throw, give you larger hot spot, and brighter spill, and a cleaner beam (no rings, artifacts, etc). This is often personal prefernce. If you wanted to use the light at closer range, it would give you a better quality beam to work with. If maximum throw is your goal then you want the smooth reflector which focuses the light into a tighter beam, giving you a smaller and more intense hot spot.