There are really two havles to Navy IRR. Part 1 is the big pool of recently discharged people, the names on a list, just as described.
Part 2 is actually people to are still doing reserve stuff and earning points and years towards retirement. They don't get paid though. The scenerio where I have seen this is the selective reserve memeber with a couple years to go towards retirement. They can transfer to the IRR from the selective reserves and continue to earn points with NKO courses. As long as they get enough points each year those years in IRR are credited towards reserve retirement. There are even some options to drill, although I don't know if this option exists for Medical Corps. The potential for being called to active duty is just like guys finishing off their 8 years as names on a list
Also, officers can be promoted while on IRR. They are reviewed on the reserve board. I was selected for O-4 while on IRR. Technically while I was on NADDS after HPSP I was in the IRR. And the years move you along the pay scale and time in rank, even if you aren't earning points. I didn't really know anything about IRR at the time. In hind site, if I knew then what I knew now I would have looked into what I could have done to try and get enough points in my five years in NADDS to make those years count towards a reseve retirement, then after I complete my current active duty time I'd have more years on the books (active plus reserve) towards a reseve retirement, if I decide to stay in the reserves after I get out.
All this applies to Navy. I have no idea how it works with Army and Air Force
http://www.public.navy.mil/BUPERS-NPC/CAREER/RESERVEPERSONNELMGMT/IRR/Pages/GuidetotheIRR.aspx