The All View is designed to allow you to quickly see all of your pictures (or a very large subset). Using the powerful date filtering capabilities, this view can quickly locate pictures regardless of what album(s) they belong to. It also can locate pictures by caption, ones without a date, etc. using the advanced filtering dialog. The album and group tree on the left allows quick filtering by albums or groups. The primary difference between clicking on an album in the All view vs. clicking on the album button is what is displayed in the tree on the left. Other than the tree, there is no difference.
The All view is also a starting point when organizing your pictures. Generally you will use the All view as the location to select pictures before adding them to albums. This view shows all pictures within your picture folder (including sub-folders) organized by albums and groups. If you want to view your pictures by the folder they are located in, then you should use the Explorer view.
The default sort order for the All view is by picture date, however you can change this to sort by filename. You can not sort by sequence (manually). You can only sort pictures manually inside each album. To learn more about sorting, refer to How do I control the order of pictures in the All View.