Mike, information about collections is stored in:
/database/cache/media.xml file in case of internal memory, corresponding SD/MS card file is /Sony Reader/database/cache.xml, but I don't know, whether it's also used for collections. You'll have to learn how to manipulate XML files, if you want to write an app that handles your collections.
The following code creates "News" collection, that is referencing 5 books, with ids: 125,126,128,130,132:
Code:
<xs1:playlist title="News" sourceid="0" id="122" uuid="170F63AF81A8-4D3D-B615-616A63F9BE06">
<xs1:item id="125"/>
<xs1:item id="126"/>
<xs1:item id="128"/>
<xs1:item id="130"/>
<xs1:item id="132"/>
</xs1:playlist>
Books are desribed as <xs1:text...> items.