What is the function of the power button on the Apple Wireless Keyboard? What does the power button on the Apple Wireless Keyboard do? When it is paired to a MacBook in clamshell mode, does pushing the power button put the MacBook to sleep, wake it up, or have some other effect? Is the power button strictly limited to turning on and off the keyboard itself?
The power button only powers ON/OFF the keyboard, it doesn’t power off the computer. 

To power off your computer using the keyboard, you might want to use any of the following:

Reference:


⌘ (Command key) - On some Apple keyboards, this key also has an Apple logo ()
⌃ (Control key)
⌥ (Option key) - "Alt" may also appear on this key
⏏ (Eject) 
⇧ (Shift)


⌃ Control + ⏏ Eject : Show shutdown dialog

⌥ Option + ⌘ Command + ⏏ Eject : Put the computer to sleep

⌃ Control + ⌘ Command + ⏏ Eject : Quit all applications (after giving you a chance to save changes to open documents), then restart the computer.

⌃ Control + ⌥ Option + ⌘ Command + ⏏ Eject : Quit all applications (after giving you a chance to save changes to open documents), then shut down the computer.

⇧ Shift + ⌃ Control + ⏏ Eject : Sleep the display, but not the computer.  (thanks to VxJasonxV)