Aloha Molli,
In my experience, the benefit of algae in the system is not limited to just Macroalgae and not limited to it's growth only in the Refugium. The old adage, "Every bit helps" also applies here. Coralline Algae and the soft algae that grows on the glass can be just as helpful to biofiltration as a bunch of Caulerpa or Chaetomorpha somewhere in the system.
I have found that most fish and inverts appreciate the cover and food source provided by algae growing in the aquarium display. It's not necessary, but I love the look. Not everyone loves the look and that's okay. For me, fish seem to fare better when they are introduced into an environment with a growth of algae. The pics below represent fairly extreme algae environments. (An algae "forest" doesn't have to be that dense.)
The intensity and photoperiod of light shining on the algae makes a huge difference. Algae growth can be greatly accelerated with better lighting which covers a wider range of the natural spectrum. The "$15 Home Depot Special", a 75W equivalent Daylight color, twist PC bulb in an aluminum Cone Reflector is probably the best bang for the buck when it comes to Refugium lights.
A longer photoperiod also helps to a point. Algae does need sleep time. A minimum of 6 hours seems to be healthy. I usually run the Refugium Light from 9pm to 9am so it overlaps the display lighting.
The benefits of a Reverse Daylight Photoperiod in the Refugium lead to better health of the entire system. See RDP Filtration in this issue of the Sea Star:
http://www.utahreefs.com/SeaStar/wmasSeaStar02Feb.pdfLastly, some hobbyists may have heard of Caulerpa going "sexual" and melting away in a day. In my experience this happens mostly when it has been starved by insufficient nutrients. Placing it upstream of Chaeto and ahead of a Skimmer help prevent this problem.
Hope this helps.
Mark
(an algae lover)
Mike's photos make the ordinary look extraordinary, don't you think?
Gold Sargassum and green Caulerpa add contrast to the white sand and clams in this suspended reef.
The YT is happy and content even though it was just added a day prior to this pic.
The pollution created by ~50 clownfish is easily handled by the Caulerpa enhanced biofiltration.
The Christmas Wrasse soon doubled in size thanks to all the bugs growing among the algae.