Depending on the hardware, some connections (by default) will negotiate their connection speed based on signal quality over time.
Both modems and routers are subject to throttling. Resetting the connection just starts off fresh.
I never turn my router (or Modem) off - it runs 24 hours a day (behind a firewall of course). I probably boot them once a month or so.
Edit -
One of the specific issues with one of my own routers is heat (it's a WRT600N, known to heat up a bit). Bouncing it doesn't fix the heat problem directly, but it does clear out the garbage that accumulates because of it.
Last edited by InlandAZ; 02/06/10 12:52 PM.