Winglets reduce drag and increase lift

Wingtip devices found on most Boeing 737s, all Boeing Business Jets and many other planes are designed to increase lift by smoothing the airflow across the upper wing.

Winglet benefits include reduced turbulence and noise, increased fuel efficiency, improved takeoff performance and increased payload range. Industry-wide, winglets are responsible for increased mileage rates of as much as seven percent.

Winglets also have application in helicopter rotors, gliders and wind turbine blades used in electrical generation.

References

Wikipedia: Wingtip device
http://en.wikipedia.org/wiki/Wingtip_device