Why does it run at half speed when the current and voltage are the same? Because it's half the watts.
E x I x .5 (ie-cos 30 degrees)= watts
That's my point. It's a watt meter. But the WATTAGE of the LOAD hasn't changed.

Example. One Hp equals 746 watts. For easy math let's assume a 75% PF, so we're drawing 1 Kva to run this 1 Kw load.
Now put a capacitor on the motor sized to exactly compensate for the motors reactive vars.
The load doesn't suddenly change to less Hp requirements....it's still 746 watts. The VA is what has dropped to the same 746 VA (unity PF).
The Kwh meter on the house is just that...a watt meter. It never did register anything but the watt draw, which is the same as before.

As to line losses, you are absolutely correct. But in terms of significant savings derived from this in a residential environment, I think they would be negligible compared to the cost of the power saver.

And as I mentioned above, unless this device actually monitors the PF and varies the amount of capacitive vars it is supplying (which I doubt), it will run the PF to leading and add line losses back since the lines are now carrying load to an unneeded capacitor.
A leading PF is just as bad as a lagging PF (unless you are the POCO and they are needing all the help they can get.)