libprs500 manages collections using tags. Its actually a more flexible system than the original collections system in the sony software. Any tag that you apply to a book becomes a collection when you transfer the book to the device.
There are two things that elibrary does that libprs500 does not do:
1) It does not allow you to buy books from the SONY Connect store
2) It does not do the pre-pagination of books when transferring to the device.
Of course it does a lot of things that elibrary does not do :-)
Its major features are listed here
https://libprs500.kovidgoyal.net/wiki/Features