The Collapsed Topic course format gives course designers and their users more control over how their course content is presented.
The Collapsed Topics course format is similar to the standard Topics format, except that all topics (except '0') can be expanded or collapsed individually, or all at once. This can help to reduce the cluttered appearance in courses with large numbers of topics or a lot of content. It also gives the end-user some control over how they want the course to appear, by allowing them to close all sections/topics in a course, except for the one they are currently using.
This page from Moodle.org provides lots of detail on configuring and customizing the Collapsed Topics course format:
http://docs.moodle.org/en/Collapsed_Topics_course_format