The iris is either manual, where you close down the aperture to taste, or automatic, usually described as dynamic. The Iris closes down for dark scenes to give darker black levels and opens up for bright scenes. It is designed to improve picture quality and has no bearing on lamp life.
Re: Dynamic iris
There are three ways in which an iris can annoy or compromise PQ. Brightness compression: In a mixed scene (a starfield is always given as an example), the bright stars will be dimmed slightly, in order to give you a lower black level.
Noise (audible): Some iris implementations are noisier than others - often it's a high pitched whine, which can irritate.
Brightness pumping: This is where the iris acts so slowly that you can see the image change brightness during the scene. Pretty annoying, but getting rarer - especially with the newest models.
It's a trade-off, but with a good implementation (like the Sony VW60 for example), most are happy to live with it in order to get much more image depth in dark scenes. I haven't really heard any complaints about the Mitsubishi models either. I can't think off the top of my head how others perform.
With a dynamic iris there is also dynamic gamma - as the lumens are reduced as the iris closes, the video signal is boosted to increase the white level, giving the impression the bright parts are still as bright but the darker parts are darker. Depending on how well this is implemented, you may find that there is not enough contrast available for the gamma boost to work in, so some compression of image data occurs in the brighter parts of the image.
As TT said, the Sony's seem to have by far the best algorithm for their dynamic iris.
Has anyone seen TIs Dynamic Black in operation on a pj? I would guess that would be pretty good too.