Does reduced-alcohol beer taste differently? Some states (in America) have ridiculous laws about what types of beer can be sold in various places.  Often times certain types of stores can only sell "3 2 beer," or beer with no more than 3.2% ABV.  

So various brewers make special, reduced-alcohol batches meeting this requirement.  

How do brewers achieve this reduction in alcohol, and does it affect the taste of the resulting beer?
You're speaking of Utah, I assume, the only state I've been to that has laws like that. I know you can achieve lower alcohol content by using less yeast, or sugar, or both, since alcohol in beer is produced by the fermentation process of yeast turning sugar into alcohol. I would guess this is primarily how it's done, but there could be other (post-fermentation) processes of removing alcohol. (EDIT: according to Wikipedia, I'm totally wrong. Most low- or non-alcoholic beer is made by boiling off the alcohol.)

In terms of taste, lighter beers (in terms of alcohol content), generally taste, well, lighter. I like many higher-alcohol beers because the alcohol seems to bring out many of the more complex flavours in the beer, making it (in my opinion) more interesting. That's not to say that all strong beers are good or all light beers are bad, as there are many other things to consider. But I don't think it's possible to get the same complexity and flavour into a light 3.2% beer as it is in a stronger beer, in my experience anyway.