My first collection was my Charlaine Harris books, then Janet Evanovich. Then I made collection for samples, so they would all be in one place and one for stuff I haven't read yet.
One thing I wish I could do, which I don't seem to be able to is put a collection inside a collection. For example, in my 30 + Janet Evanovich collection, it would be nice to then group all the Stephanie Plums together. However, it is apparently easy to have books in more than one collection, so I suppose that helps.
People always ask if I like my kindle. I always tell them that I love it. I have read books, or at least parts of books on my iPhone, which is OK in a pinch, but I doubt I would read a whole back that way. I have read a whole book on my iPad also, and while the format was nice, the screen did tend to give me a headache after a while. But, the iPad does let me access my Kindle library, plus books from Apple's book store, and it will put PDFs in there and other less proprietary formats than Kindle uses.
I think the proprietary format is Kindle's biggest problem. I know that ebooks are getting more and more popular, but I doubt they will really become as common as DVDs until there is one format. I was really intrigued by the Nook from Barnes and Noble, but, as I already have a large library on my Kindle, it is not really feasible to switch. But, at least I am able to read my Kindle books on devices like the iPad.
Until they do agree on one format for ebooks and we are free to purchase any ebook device that strikes our fancy, I will stick with Kindle. And, really, I do love it. There is nothing better to take on a trip, it has saved me a lot of weight in my carry on bags and suitcases to not have to bring multiple books to read on vacation. I just toss in my Kindle and I have hundreds of books at my fingertips, with the ability to buy any new book that appeals to me, as long as I'm in the US. I definitely applaud Amazon for adding the ability to make collections. It is going to make navigating my Kindle much smoother.