[ronm]

"Stall-Tips" do several things.
They help to prevent higher pressure air below the wing-tip from slipping around the the wingtip to the low-pressure area above the wing. The combination of this air movement around the tip, and the forward motion of the plane creates a spiralling vortex off the tip of the wing. This vortex creates drag without adding lift out at the wingtip.
The movement of air from bottom to top around the wingtip also reduces the effective wing area out at the tip, as the pressure differential between the top and bottom of the wing is reduced. This also makes the wing more suceptable to "tip-stall".

Another thing to consider is sealing hinge gaps. The pressure leakage from bottom to top through the gaps also reduces effective wing area.
(along with other undesirable effects)

Ronm