The first talisman, the Aqua Mirror is a very important and powerful weapon. Michiru is blessed as the keeper of the mirror, most likely because of her intuition and deep perception abilities. With it, she can see "what lies beneath:" the truth, the past, and the future. It is the talisman of prediction, the talisman of revelation - the light of the Sacred Cup.
The Deep Aqua Mirror is first seen in Act 24 of the manga during a "coincidental" meeting between Mamoru and Michiru. He bumps into her and the mirror drops to the ground. They both reach to pick it up, and it catches a glimpse of Mamoru's eyes. Michiru notices the "noble" texture of his eyes and asks if he was a 
prince in a previous life. As she says, "the mirror reflects previous lives." Also in Act 30, the Aqua Mirror reflects the true identity of the soldier of ruin, Sailor Saturn. Although she was not present, it either reflects a vision of Saturn from the Silver Millenium or a premonition of her revival on earth.
Three of the mirror's most prominent abilites are shown here. First, it must be very durable and strong; it doesn't even scratch when it hits the ground! It's glass still smooth and clear, no crack, no dent. Second, it reveals the "true essence" in its reflection. Nothing else has exemplified the "noble" and "royal" eyes of the Prince with such accuracy. With merely a glimpse, it unveiled so much of Mamoru's personality and past life - which brings me to point three: the past. I think it's ability to "see" previous lives is greatly influenced by it's reflection of one's true soul. How can you know the truth about someone unless you know of their past? I mean, how could I relate "nobility" to his eyes if I had no knowledge of his past existence as a prince? It all ties in together.
Act 25 unveils the DAM's connection with the dream/psychic dimension. Kaolinite begins to look into her water to see the future. She sees the three talisman and the "light of destruction" but is almost immediately cut off. Mamoru also awakes to that same vision. A dream of the future? In the Delta zone, Michiru tries to read the mirror but "it was interrupted." It got "cloudy, but then it cleared up."[1] Somehow the DAM has the ability to predict the future and enter the dream world. It seems to detect any psychic connection and reflects it; it becomes "cloudy." Kaolinite, Mamoru, and Rei all have a sense of premonition and psychic abilities. They all can interrupt each other and influence their dreams or predictions.
The DAM can see the present in any light. In Act 31, it shows the captured bodies of the Inner Senshi tied to a column.
But the mirror is not just a "reflector;" it also acts as a defensive and offensive weapon. As a defensive weapon, the mirror can unveil any weaknesses in an enemy. The only anime appearances of the DAM proves its defensive skills. 
In Episode 124 it is used to examine Dr. Tomoe's daimon puppets and reveal the true one. Its purpose in the SuperS Movie is to show the weakpoints on the fairies. It emits a light mist that makes weakpoints glow and blinds the enemy. There, it acts like both a defensive and offensive move. In Act 31, the mirror melts and destroys the six enemies who attack the Inner Senshi.
The DAM is probably the most useful out of all the talisman. It doesn't seem to drain any energy or life - like the Space Sword or Garnet Orb - and plays a major role in completing the Outers' mission. Michiru keeps it well protected and very close to her at all times. However, at the end of the Infinity Arc, she gives it to Chibiusa as a present. Perhaps, the future Princess Selenity has "the sight" ...
1 Act 25. Infinity Arc. Sailormoon Manga.