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When in Settings under Safari>Advanced I see website data. What is this?

Also, what does a hard reset (holding sleep/wake and home button) do?

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For the future, you should split up your questions. –  gentmatt Jan 10 '12 at 10:16
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up vote 2 down vote accepted

Website data

When clearing website data, Safari removes cookies, Flash plug-in data, and information from databases, local storage, and the application cache.

Hard Reset

I don't know what the hard reset does exactly. I only know that it does not remove your stored media. This kind of reset is necessary, when neither the display nor the side buttons response normally and the only other option to shut down the device would be removing the battery.

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