Winglets provide better efficiency. If I remember correctly from my Aerodynamics classes (several years and many beers ago) winglets create a theoretical infinite wing, eliminating drag from vortices created by the traditional finite wing shape.
Oh boy, not again...winglets do not create a theoretical infinite wing, and they do not completely eliminate Di ("induced drag", or drag from wingtip vorticies). I always refer to this link, but really do check out http://www.airliners.net/discussions/tech_ops/read.main/77356/4/
, particularly my reply (#6). In it I explain exactly how winglets work.
Even though the drag-creating vortices from the wingtips may be eliminated, the winglets themselves create their own wing(let)tip vortices. These are smaller of course, or there wouldn't be much point.
A common misconception. Winglets DO
NOT eliminate wingtip vorticies. Rather, they utilise them to produce forward lift (thrust). You are, however, completely correct that, because winglets are just little wings, they have vorticies and induced drag themselves.
Sorry I'm late replying to this,