Envision low and restricted traffic designations as pathing hurdles. When a dwarf considers how to get somewhere, s/he will prefer not to "jump" over them--they'll generally prefer to take normal traffic areas--unless the traffic designations are blocking the entire path, at which point the dwarves have to "jump" (and will). They don't slow movement down, but dwarves won't want to walk on them if they can find a reasonable path around them. Restricted traffic zones covering an entire central area won't do that much, but if you, for example, restrict the center of the room and leave a 1-tile path around the edge, you should notice your dwarves tending towards the edges. Leave a 1-tile normal traffic path going through the middle of one side... and watch as the beards tend towards that path.
The idea is that, if there are multiple paths to an area (especially noticeable in open areas like outside), you might have some preference about how you want your dwarves getting to that area (to, for example, avoid trampling saplings and all that). I, for one, haven't had great luck getting FPS gains from setting traffic designations, but supposedly it helps if you've got a bunch of big rooms and lots of different possible paths.
Restricted traffic zones will not prevent dwarves from going somewhere, but they will make dwarves "go around," if there is another path to their objective. The numbers attached to the different traffic zones--default 1/2/5/25, I think--signify just how far dwarves will go to "go around" the area.