A few papers have been published suggesting that ESWT could work and reduce spasticity in neurological patients- my own experience tells me the same - mechanism of action is not yet established - what can you tell me about?
From what I know concerning shock-wave therapy (mostly from my physiotherapist training) I would say that the effect should be at the level of the musculotendinous structures (ex: reduction of fibrosis). So the effect is probably more a decrease of contracture (that is almost inseparable from spasticity) than a spasticity decrease per se. This is only a hypothesis of my own so please tell me if other mechanisms are already proposed !
You can look for a recent review by Smania et al., in 2010 that discussed the use of exercices and physical modalities in spasticity. Spasticity is a popular area of research, but only a few studies tested the potential of physical modalities probably because, as you said, the mechanism of action are unknown. In order to favour a knowledge transfert to clinical pratice, research projects must not only test the effects on spasticity, but also bring insight on the underlying mechanisms !
I presume the effects may be due to the alteration of muscle contractile properties, as they are the prime factor for cerebral spasticity (Elbasiouny et al, 2010).