Light causes the reflection effect on the black stones, which look quite similar to the stones in the Java version of gGo. When rotating the board, the reflection will slide over the stone surface relative to the light source, which is placed slightly to the upper left. Think about a lamp shining just over your head.
Shadows significantly add to the overall 3D scene. The shadows are drawn relative to the light source. Basically they are just another light effect, but can be toggled off independent from light to improve performance in software mode while keeping the reflection effect. Shadows require light to be enabled.
You might notice that the shadows do not move relative to the light source when you rotate the board. I tried to implement this feature, but the shadows would mostly look quite weird. I am sacrificing some realism here for better quality.