I'll throw my .02 in too. Please correct any errors I have since I am still very new to all of this.
A C&R is a type of FFL. it is for a collector of older arms. Guns like a Yugo SKS and CZ52 are both examples of C&R guns that are real popular right now for collectors. You just have to fill out the application on the ATF web site and mail it in with your $30 (it might be $35 I can't remember). In my area, I also had to notify my local sheriff that I was applying. I don't know if this is a state law or federal, but I had to make him aware of my application. No biggie. For me it took quite a while to get it. I have read people getting theirs in 30 days or so, mine was more like 3-4 months. It is worth it to get one. For one reason, you can have any gun that is C&R eligable shipped right to you, no FFL type 1 check needed. Second, some places will give you very good discounts on all sorts of items like tools and such.
There is one downside, sort of, to having a C&R and that is the bound book. Every gun you buy that is C&R eligiable must be documented and the bound book can be examined by an ATF agent to make sure you are in compliance. Sounds like big brother's gonna knock on your door but from what I have read, it's not that big of a deal at all. You just have to submit to an audit of your books to make sure you are following all the rules. Also, not a real biggie since you may never get audited. It's all up to the ATF and how you pop on their radar. Most people who have been audited have commented that the agents are very nice and it's a quick in and out proceedure. I don't want to raise any serious concerns where they are not warranted.
Whew! Now that I've written friggin' War and Peace here, I hope this helps.