It's psychological. Having to compete with other people for an item increases the perceived value of the item, and more people are competing for it at the lower starting price. Also, someone that really wants the item may have a higher starting bid if there's a minimum reserve, because they're effectively bidding against the seller.

Lets say there's some antique you want to get at least 100 dollars for, and this is the normal going price for the item. If you start the bidding at that price you might not get anybody to make the first bid, because It's not a particularly good deal. They're only going to pay that if they were going to buy one anyway. If you start the bidding at $50, however, you might get a couple people to start bidding that know it's a good deal at that price. Once they're in competition, they want to win the item, and may be willing to pay 110 for it.