Please refer to the user manual or video for correct setup instructions:
Version 1.0.1 update: Fixes bug when used above 44k sample rate.
HM-1 Headphone Monitor Correction uses HRTF models to emulate speakers in 3D space in front of the user. These models are accurately measured and include both the frequency and timing information required to emulate speaker position.
HM-1 contains 50 HRTF models to allow the user to select the one that is most realistic sounding, and then save in their default template (refer to manual).
HM-1 also contains frequency responses for various speaker types, so the user can get an idea of what the mix will sound like on different audio equipment - these range from large monitor speaker to mobile phone.
If you use headphones a lot with Reason, then try out HM-1 and see if it can improve your mixes.