I've used biowheels on freshwater systems before. The whole point to the biowheel is that it provides a large, highly oxic surface area for aerobic bacteria. These are the guys that convert ammonia into nitrite and then into nitrate.
When I ran it on a (freshwater)tank that was going through the initial phases of the cycle it kept ammonia levels very low, but nitrites and nitrates were very high. On other tanks that I've had go through the cycle, ammonia levels were initially much higher, and it took a couple of weeks to establish a filter flora that processed ammonia -->nitrites -->nitrates
In sum, they're a great way to rapidly reduce ammonia, but they can result in a lot of nitrates. I suppose if you combined the biowheel with some type of nitrate sink it could be used on a reef tank, but it doesn't seem to be a very common technique. Of course my experience should be taken with a grain of salt (or lack therof) since it was with freshwater systems, perhaps they function differently in a marine setting. | 
