Zyg, another perspective on the benefits of a shorter rest time is the workload involved. Workload is not how much weight one lifts for one rep, or even the total weight moved over the course of your workout, but rather work done over a unit of time. Lets propose a simple comparison. Lets compare two bench press workouts. In both workouts, we will assume that the same form is used, and that the lifter moves the weight 1 foot per rep, taking 2 seconds per rep. Let us assume that 200 ibs is being used.
Workout #1 he takes 2 minutes between sets, enough time to get a fair amount of recovery, so he will not loss much strength from set to set
Set 1 12 reps
Set 2 11 reps
Set 3 9 reps
Total time 6 minutes 4 seconds (we'll round off at 6)
Workout #2 he takes 30 seconds between sets, so he has not recovered as much
Set 1 12 reps
Set 2 9 reps
Set 3 only 5 reps due to fatigue
Total time 1 minute 52 seconds (also rounded to 2 minutes for simplicity)
In workout #1 200 ibs was moved 32 ft in about 6 minutes
In workout #2 200 ibs was moved 26 ft in only 2 minutes
While in workout #2 only 81% as much total work was done, but it was done in 1/3 of the time that workout #2 was. In fact the workload (work done per unit of time...this would be horsepower if we were talking about your car) is about 143% higher in workout #2 than in workout #1. Which one has required the muscles involved to work harder? Clearly it is workout #2. It is the workload involved, not total work done, that stresses the muscles & forces the body to compensate...that stimulates growth. Were it the other way around, long distance runners would be sporting freakishly massive thighs and calves. If the amount of time taken to do the work is removed from the equation, and only total work done is the primary factor in stimulating growth clearly long distance running would be the ideal leg rountine. Running ten miles requires far more energy, and work done by the legs, than doing a mere 10 sets of squats. I have as of yet to see a marathon runner with 32" quads.
Perhaps this perspective sheds some light on why bodybuilders with their lighter weights, higher reps & shorter rest times have more muscle mass than many of their stronger (for a rep or two at least) power-lifter counter parts.
Just my .02