The Swatches palette goes hand in hand with the Colour palette. Let's say you have just made this nice blue that you need to use throughout the whole document. Yes you can type the percentages of that blue in your Colour palette every time you need to use it, or you can make your life easier by recording that colour into a swatch which will then go to your Swatches palette. That is the main use of the Swatches palette. You can record spot colours, CMYK colours and RGB colours. This screenshot will show you all of the colours that can be recorded in your Swatches palette and how to recognize them.
The next several steps provide an explanation of the different things you see in the Swatches palette.