setRedirect doesn't works in the model file of a component.
models->test.php
$this->setRedirect(JRoute::_('index.php', false));
In Joomla 2.5 and Joomla 3.0
Redirection inside a model file:
$app = JFactory::getApplication();
$app->redirect(JRoute::_(JURI::root().'index.php'));
This redirection works in all files inside joomla, But the better way is to use in controller file is the below one.
Redirection inside a controller file:
$this->setRedirect(JRoute::_('index.php', false));
In Joomla 1.6 and 1.7 use this for redirection inside model file:
global $mainframe;
$mainframe =& JFactory::getApplication();
$mainframe->redirect($url, JText::_('Your Mail sent') );