For this example, let's say you have a set of Account records, each having the standard currency field "Annual Revenue" populated. For reporting purposes, you want to categorize your Account records into three different tiers.
Gold: Annual Revenue > 3,000,000
Silver: Annual Revenue between 1,000,000 and 3,000,000
Bronze: Annual Revenue below 1,000,000
Before buckets were introduced, you may have created a formula field that looks like this:
While this works, you've just created a field for this very specific purpose.
Bucketing can help you (and your non-admin employees) more efficiently do the same by following these steps:
1) To create a new Bucket field, within a new/existing report, click on the "Add Bucket" link within the fields section.
2) Next, specify a source field in the "Source Column," give your Bucket field a name, and define your ranges:
3) Click on the "OK" button and you'll see your newly created "Service Level" field within your report grid:
Unfortunately, the current bucketing offering lacks the ability to create and use filters.
What if you had a client that has been with you from day one. Sounds like instant "Gold" level client criterion to me. It would be great to be able to include additional criteria, in this case something like "Initial Contract Date < 1/1/2005" = Gold, to the bucket calculations.
Bucketing in Reports: http://www.youtube.com/watch?v=QFYEtBtLHG4
Categorizing Data Quickly with Buckets: http://na9.salesforce.com/help/doc/en/reports_bucketing_overview.htm