I have an some 3 tone arm

On my sme 3 tone arm there is a reservoir for silicone damping fluid
is this just slowing down decent of the needle or does improve the sound?

castner, it is a damping mechanism used to dampen resonance in the bass. It all depends on the cartridge you are using as to whether or not it will be a benefit.  
  • I have a dynavector ruby low output moving coil

You should fill it so the paddle is just in the fluid.If you fill it too much it will deaden the sound.
Here ya go!
Functionally when a tonearm reacts to the resonant frequency it produces a peak of output energy. This is seen as woofer pumping which is essentially the stylus over reacting to a small warp in the records surface. Fluid damping stops the stylus from over reacting. That is what is "damped".
Dear @castner : If some of your 3 tonearms are unipivot designs then you need to use the silicon no matters what.

As a fact even if are not unipivot designs it's always best to use the silicon in paddle and normally will improves the cartridge/tonearm quality performance.

If the tonearm design paddle characteristics permit it you can try to use more or less silicon and listen with which quantity improves more the quality performance.

Normally too silicon can't deaden the sound/overdamped if you take care that it does not impedes the free tonearm vertical/horizontal movements.

Regards and enjoy the MUSIC NOT DISTORTIONS,