No difference in reliability. Potentially quite big difference in speed, but if you're looking at the main laptop models (not the ultra-low-voltage ones in subnotebook/ultraportable/"netbook+" models) then you are very unlikely to notice the difference. There are some slight program-compatibility and battery-life reasons to go with the higher end ones, but in general they are not compelling for most people.

HOWEVER, If you need a machine with a ULV processor, for either size or battery-life reasons, I would avoid the i3s.

Let me try to decode the differences from here. Here are representative i3, low-end and mid-range i5s (400 and 500 series)
http://ark.intel.com/Compare.aspx?ids=43529,47341,43537,

The main difference is lack of turbo boost on the i3. On the i3-350M (representative general laptop model) the base speed is 2.26ghz which should be fine for general use. The i5-430M has the same base speed and can get a slight bump to 2.53ghz. The i5-520M has a slightly higher base speed but can get larger but not huge bump (nearly 25%) to 2.93ghz.

If you have integrated graphics (not much reason not to, unless you game or run 3D apps) then the built in graphics are a little faster on the i5 (not much reason to care IMO; if you cared, you'd get discrete graphics.)

No other differences between the i3-350m and the lower end i5 series (i5-430m) ... the i5-520M (and higher end 500-series models, and i7s) add these three things:
* Intel® Virtualization Technology for Directed I/O (VT-d)
* Intel® Trusted Execution Technology
* AES New Instructions
...and if you don't know what they are, you don't need them. Indeed, in the first two cases, if you don't know what they are, you probably want to leave them turned off in the BIOS even if you have them.

Now compare 3 similar ultralow-voltage processors:
http://ark.intel.com/Compare.aspx?ids=49665,50026,50028,
...on these, it should be immediately obvious from the base and turbo clock speeds (1.33ghz) that turbo makes a much more significant difference (60% on the 560UM, 40% on the 470UM) while the i3 is stuck at its basic maximum. Even with the Core i3/i5/i7 being faster than a Core 2 at the same clock speed, I do not think the base speed of 1.33ghz is likely to be a comfortable "general purpose" machine for most people, and IMO unlike on regular laptops (where it is only a "nice to have") on ULV machines the turbo feature of the i5 (and i7) makes the difference compelling.