A tutorial video is available here.
Firestorm provides a way to organize your friends - and other people - into sets or categories, using your own criteria. Thus you can create sets of friends, colleagues, business contacts, and so on.
Such sets can be color-coded, and those colors can then be applied to chat, mini map, and so on.
Avatars can belong to one or more sets - or none at all.
Contact Sets allow you to add new contacts to your list, even if they are not on your friends list.
Adding contacts this way does not grant any rights or abilities that you would not already have. Anyone added this way who is not on your friends list will not be treated as a friend.
Adding people this way is merely a convenience for listing and easily accessing names and for having them stand out with the use of color.
The Contact Sets window is accessed from the top menu bar, Comm > Contact Sets, by pressing Ctrl-Alt-Shift-C, or by opening your Conversations window, Contacts tab, Contact Sets sub-tab. There is a Contact Sets button available for the Toolbar and it is also available as a tab in the People panel.
Your contact sets are stored locally on your computer as a .xml file, be sure to back them up before updating the viewer. The file is named settings_friends_groups.xml and can be found in the same location as your chat logs. This is in the same folder as the user settings folder. In the folder with that account name.
A sample of the Contact Sets window is shown here (names have been redacted for privacy).
This window allows you to customize the behavior of the contact list window, and how colors are applied. access it by clicking the small gear/sprocket icon to the right of the displayed set name.
Note that this is is in addition to the global settings in Preferences → Notifications -> People → Notify me when my friends log in or out: As toasts / In nearby chat and console / In nearby chat only. If any of those are enabled, you will still get notifications for all friends; if disabled, then the settings here take precedence. You will choose whether to view the notifications as toast and/or chat in the settings below.
If someone is assigned to more than one set, then the color of the smallest (ie most unique) set is used in the affected functions.
Click on the + icon at the top, then type in the name of the set and click Create in the window that opens. Select the set from the dropdown list.
Now, go through your list of contacts and check each of those whom you wish to add to the new set. Note that you need to hold down CTRL while selecting multiple people for the same set. Then right-click any of those selected, and from the menu, select “Add to Set”, this opens a window where you can select a Set to add the contacts to.
If you select a name on the list the other buttons to the right will become active:
If you right-click on any name, you get a menu with several options.
Once you have one or more sets created, and contacts assigned to them, you can put them to use. If you select a set from the drop down at the top, you can then select all members of set (right click any contact then press Ctrl-A). At this point if you right click again, you have the options to start a conference call, and do a mass teleport.
NOTE: Using the contact sets features just described does not allow you to get around built-in SL limitations. Therefore, no matter how large a set, you cannot send a mass TP to more than 20 people at a time.
It is possible to assign friends to more than one set. Simply right click on their name and add to as many sets as apply.
See this page for documentation on Firestorm 4.6.9 (42969) and earlier.