The contents of the resource.cfg file are:
Priority 501
DirectoryFiles Files/... autoupdate
Priority 1000
PackedFile Overrides/*.package
PackedFile Overrides/*/*.package
PackedFile Overrides/*/*/*.package
PackedFile Overrides/*/*/*/*.package
PackedFile Overrides/*/*/*/*/*.package
Priority 500
PackedFile Packages/*.package
PackedFile Packages/*/*.package
PackedFile Packages/*/*/*.package
PackedFile Packages/*/*/*/*.package
PackedFile Packages/*/*/*/*/*.package
Priority 499
PackedFile Test/*.package
PackedFile Test/*/*.package
PackedFile Test/*/*/*.package
PackedFile Test/*/*/*/*.package
PackedFile Test/*/*/*/*/*.package
Priority -50
PackedFile Probation/*.package
PackedFile Probation/*/*.package
PackedFile Probation/*/*/*.package
PackedFile Probation/*/*/*/*.package
PackedFile Probation/*/*/*/*/*.package
Priority 500
PackedFile DCCache/*.dbc
The way I understand this (someone else may correct me) is that the Priority number gives you a lot of flexibility when trying out mods.
Overrides with a priority of 1000 will take precedence over the game cache (objects already installed through the launcher). Meaning if you've created or downloaded a special version of an object, as long as it is in the Overrides folder the base game/store object should always be overridden.
The Packages folder has the same priority as the DCCache (downloaded store items, exchange items, mods that come in the Sims3pack format). This is the folder I usually have several sub-folders in. I've named one "NRaas" so that I can keep Twallan's mods contained in a single folder to compare dates with his recent updates wiki page. I have others for CAP, slider, and other types of mods that rarely need to wait for game updates and can be used on any patch level. I have two others "Scripts" and "Objects" that do depend on game updates to remain functional. If a new game patch hits, I'll temporarily remove the Nraas, Scripts, and Objects folders and start a new save game if I get an itch to see the new features.
All new mods I download or create/modify are initially placed in Test. My own rule is that they stay there for at least 2-3 weeks before I move them over to the Packages folder. A busted mod might not necessarily surface as an immediate issue, in fact sometimes its hard to tell they are impacting your game at all.
I don't use the Probation folder much, usually only when I have downloaded several mods at once and then notice lag or unusual behavior. I use it as a secondary test/staging folder to try and see which one(s) are at fault or if I suspect there maybe a conflict that the Dashboard tool doesn't see.
In general, mod use is really going to boil down to trial and error to determine what works for each individual. It is real easy to get frustrated and angry, especially for people that are into 3+ generations save. I used to treat all the verbiage for "make sure to backup and save your files" as people being overly precautionary. But now I have a copy of my game folder for every month in the past 5 months. - Overkill and borderline OCD: yes. Smashing my face into the keyboard because I messed up my game: not as much.