Canon 40D Night Time Exposure Tests: Part Two
In a nutshell, in-camera noise reduction does a wonderful job of reducing sensor noise on long exposures. It works by immediately repeating your shot, but it turns the sensor on and keeps the shutter closed. This creates a "dark frame", which is electronically subtracted from the original image to produce a noise-free image. The disadvantage is that it locks up your camera for a period of time equal to the duration of the original image.
Here is the full image. You can see 100% crops of the shot without in-camera noise reduction here and here. You can see 100% crops of an almost-identical shot taken with in-camera noise reduction here and here.