Fresnel (What is it?)

Just wondering what the heck the fresnel value does in the ray mirror and ray transparency settings. So far as I know Fresnel was a scientist who invented flat lenses for lighthouses…

Yes. And he discovered a few physical laws.

Fresnel is easy to notice (not so easy to calculate). Every surface is semitransparent, i.e. it is partially transparent and partially reflecting light. If you look perpendicular on a window it is nearly totally transparent - you can look through it. If you look at a very flat angle at the window, it becomes reflective. You will see yourself.

The same applies to water. This is the reason why you can see to the bottom of a lake (if it’s not to deep) from a plane, but not from the shore.

am i wrong or fresnel effect is the refraction phenomena?

Err…, difficult to anwer. Refraction is covered in the fresnel equations, but they deliver much more than simple refraction.

They treat light as polarized waves and not only tell you something about the amount of reflected and transmitted amounts of the lights intensity, but also about it’s polarization.
http://www.colorado.edu/physics/2000/index.pl

They also give a solution for total internal reflection and let you explain the coating for optical instruments.

I never understood fresnel untill I saw this page:

http://www.hash.com/am2004/Rendering/Fresnel%20Term/Fresnel%20Term.htm

So you’re saying in Blender that the fresnel settings relate to
a) at which point does the angle from normal change from transmitted to reflected
and
b) how much of the light is affected by being cast greater than this angle.

Have I got that right?

Yes.
http://de.wikibooks.org/wiki/Blender_Dokumentation:_Raytracing-Spiegelungen
See images 2 to 5.