Why do you say it drains your battery like crazy? I am not saying it doesn't, but I haven't noticed it.

Doesn't iOS now have a location service that will update apps of your location without running the app constantly in the background?

The location based reminders use cell phone tower-based location, not GPS. Since your phone is constantly polling cell phone towers anyway, it shouldn't use more battery than usual, unless it forces the phone to poll towers more frequently. (I'm not sure of the implementation details)

I personally have not noticed more battery drain than normal on my 4S.

Yeah - lots of people are saying they're having worse battery performance on the 4S or iOS 5 (lots of people aren't, too), and then lots of those people are claiming lots of different things such as turning off various features (and also not doing anything different at all!) has dramatically helped. In other words, essentially no science is being done and no one to my knowledge can say anything definitively yet, but lots of folk remedies are being tweeted. Assuming there's not a bug in the geofencing code, it shouldn't use too much more battery at all because it only goes out to the GPS when available cell towers—which are being constantly communicated with anyway—change.

I am getting way better battery performance that I was getting on my 2.5yo 3G with iOS4 that I upgraded from so I am yet have an issue with it.

Yes, that was part of the multi-tasking model rolled out in iOS 4.

Location based reminders are a feature in iOS 5 across all phones. My vanilla 4 can do it, so presumably my old (and iOS 5 supported) 3GS can too.

Siri itself is the only (big?) iOS 5 feature that is hardware locked to the 4S.