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Sets are a grouping of photos and videos that you can organize around a certain theme, such as Our Hawaii Trip. You can use them to highlight your favorite photos and videos, or make an album that is only pictures of your dog, or of photos and videos you've taken with a particular camera.
A user's sets page
A set
Collections are a grouping of Sets (or other Collections) so you can organize around grander themes, such as People, Travels, or by year (2007, 2006, etc).
A user's Collections Page
A Collection
The Organizr is where both Collections and Sets are created. It also allows you to perform common tasks on large batches of photos and videos, such as tagging, changing permissions, or editing timestamps. It’s really rather handy.
Organize your Sets & Collections