I tend to use collections for organising by shoot etc, as no one will see what my collections are. Not all shots go into collections though.
Every shot gets key worded, a lot of the key words also have synonyms behind them, these are embedded in the picture when exported.
I think like a lot of things in Lightroom there is more than one way to organise your images, it is just a case of finding what works for you...
For instance I find that I never use the folders information on the left side of the Library module, whereas I use the collections a lot...