Rather that reprise the subject here, please refer to http://en.wikipedia.org/wiki/Retroreflector

Ever notice the alternating red and white reflective strips on trucks? That stuff works great and stands up to weathering and sun very well. I've used that on trailers, motorcycles, and other stuff.

http://www.conspicuity.com/

Granted there are lots of reflectors alongside the road, but in general, motorists try not to hit them. So if you have reflectors on your bike, they'll probably try to avoid hitting you too. So, they do work, but IMO, nowhere near as well as bright flashing lights...which don't work anywhere near as well as not riding at night.