I know all the cliche answers: "it rounds the beer out", "it cleans it up", "it takes away some of the harshness".
I'm looking for a definitive answer of whats actually happening during extended cold storage. Is it just clarity? Are you dropping polyphenols/tannins that affect FLAVOR? Couldn't this be achieved with some finings and a quick crash? I've had some pretty darned clear beers that I've turned around in less than 2 weeks, grain to glass with some prepared gelatin, big yeast pitch, and careful manipulation of fermentation temp.
My only lager to date is Jamil's Oktoberfest that I primary'd @ 50* for 3 weeks, cold-pitched with about a gallon starter. I have to be honest, I am a provisional BJCP judge, taking my tasting exam @ the end of the month, and consider myself to have a pretty good palette. I couldn't really tell the difference between the sample of beer pulled @ 3 weeks, and the beer after it sat in a fridge for a month.
Listening to Jamil and John Palmer talking about it, it sounds like the purpose is largely to achieve clarity. I also seem to remember Jamil saying something to the effect of "if you have a strong, healthy primary fermentation, you don't need to lager as much".
In many ways, it seems like decoction to me: an antequated process that is not really necessary anymore given upgrades in technology (in the case of decoction: advanced malting techniques; in the case of lagering: yeast selection/genetic modification, fermentation temp control, and refrigeration).
Or alternatively, maybe I just need more experience tasting pre-lagered lagers and brewing lagers! :^D