DHCP reservations are used to set aside IP addresses, in order that they not be handed out upon DHCP request to computers that they're not meant for.
For example, you have a server on your network and you want it always to use 192.168.1.2 because you have scripts configured to use that IP address. Even if you have the static address 192.168.1.2 configured on the server, the address might be handed to another machine if the server is down for any appreciable amount of time. Then, when the server came up again, there would be two computers with the same IP Address.
DHCP reservation avoids this by telling the router/DHCP server to hold that address. On Windows Server, you create a reservation for an IP address and assign to the reservation the MAC address of the computer that should receive it. When any computer comes online, the MAC address is checked and if it matches the reservation, it receives that IP address.
I'm not familiar with ARP binding, but a quick search suggests that it's a security precaution against ARP poisoning. In ARP poisoning, a rogue computer sends ARP messages that associate an existing and legitimate IP address with its own MAC address. I think the ARP binding that you're referring to involves an independent, trusted database kept on the router that checks ARP requests and prevents traffic from being routed to a rogue host.
I hope that helps. But check the manual for your router:
http://media.netcomm.com.au/public/assets/pdf_file/0015/14244/BP504_UG.pdf