When you set LUN reservation to on at a new 20 GB LUN it will claim that 20 GB immediately. If you do not set the LUN reservation, it only claims as much data from the Volume in which the LUN resides as data is written to it.
Let's say you have a Volume of 100GB and a 20 GB LUN. In the 20 GB LUN with no space reservation, 5 GB of data is written. The volume will show 95 GB of free space
When setting space reservation to on, the volume will show 80 GB of free space eq it will claim 20 gb immediately even when there is no data on it..
When you do not set the LUN reservation, it is called Thin provisioning. Netapp wrote an excellent Technical Report on this. You can find it here: