First things first: Re-rolling a character means you start all over on a new char, but with the same goal. You simply make a new one where you implement the changes you've found necessary.
A reincarnation is something different, and what I believe you're actually referring to. You can lesser or greater reincarnate your character at any time (and at a great cost every time), with the extra options to switch 1 or 3 levels. I could use a lot of time to spell out the differences between lesser and greater and the +0/+1/+3 options... I wont, because the wiki says those things better than I will
http://ddowiki.com/page/Reincarnation?useskin=sparseman
When you're lvl 20, you can True Reincarnate, which will delete your char and give you 34 pts and some other bonuses to build your new character from. This reincarnation is also described on the wiki.