SharePoint Document Sets - not to be confused with FOLDERS

Document Sets - in my view is a very misunderstood and commonly misused entity in SharePoint.
 
The general perception about Document Sets is that they are Folders with a Welcome Page, but there is much more to it than just that.
 
A Document Set is a separate entity while a Folder, more or less, behaves as a location. Therefore, apart from grouping related items together a Document Set can also be treated as an item in a SharePoint Library. Therefore, all operations that are applied to a SharePoint Library item can be applied to a Document Set.
 
Below is a list of features of Document Sets:

• A Document Set contains a welcome page which can be used to give more information about what it contains. Web Parts can be added to the welcome page to give a snapshot of what the Document Set will contain.
• It can contain separate Metadata and Site Columns from the Library in which it is contained. Metadata and Site Columns can be shared by all documents in the Document Set or can be applied to individual documents.
• By creating Content Types inherited from Document Set, we can define default documents that will be created along with our new Content Type. Suppose, we define a Content Type for Sales Report then we can associate all Sales Reports templates with that Content Type. Each time a new Sales Report Document Set is created, all the templates will be created along with it and users can simply fill in those templates to generate their report.
• Workflows can be associated with the entire Document Set or individual documents inside the Document Set
• Versioning can be applied to the Document Set.
• Specific content types can be made allowable inside a Document Set.
• Unique permissions can be associated with a Document Set.

Below are a couple of features not available with a Document Set, when compared with a Folder:

• Document Sets cannot be nested i.e. Document Sets cannot contain Document Sets
• Document Sets, as the name clearly suggests, cannot be associated with SharePoint Lists.

To enable Document Sets within your site you need to activate the Document Set feature which is available at the site collection level.

Document Sets are not available with SharePoint Foundation 2010.

Below are certain links for further reading:

• http://office.microsoft.com/en-in/sharepoint-server-help/introduction-to-document-sets-HA101782466.aspx
• http://blog.knowledgelake.com/2011/08/why-document-sets-are-not-folders/

For limitations of Document Sets refer this link: http://www.sharepointanalysthq.com/2011/09/document-set-limitations-and-considerations-in-sharepoint-2010/