Many people don't seem to know the Set Matte effect plug-in exists, maybe because it officially exists only to provide compatibility with earlier projects. That seems to have changed since Set Matte was upgraded to support 32-bpc color depth in After Effects CS6.
Set Matte was a go-to filter before Track Mattes appeared in the Time Layout window in After Effects 3.0, the first version shipped by Adobe. It's a useful item if you want to use the same matte in multiple places, which is one of the main “use cases” that people mention when they get specific about nodal compositing needs (though not the likes of Maschwitz and Christiansen). As noted in AE Help :
The layer used as the matte with the Set Matte effect can be anywhere in the layer stacking order, unlike a track matte layer, which must be directly above the matted layer in the layer stacking order. Also, one layer can be used as the matte for multiple layers with the Set Matte effect.
An additional benefit of Set Matte over Track Matte (see Chris Meyer for background) is that you can add further effects to the main layer, an edge effect like Drop Shadow, or Remove Color Matting (for premultiplied alphas), Levels, etc.
A disadvantage is that Set Matte is a “compound effect” (see videos by Angie Taylor and Chris Meyer), using the calculated result of a layer to modify another, so that masks, effects and geometric transforms must be applied to the matte layer first. As usual, when in doubt, pre-compose. Another shortcoming that may not be obvious, when reviewing a project, is which layer is the matte used by Set Matte, especially when scanning the Flowchart panel (though the effect name can be customized).
Ltwe, Mikey Borup added a reminder, After Effects Quick Tip: Set Matte Effect,
Perhaps Adobe could add some extra juice to the Set Matte effect, like the extras seen in bs_SmartSetMatte, a Pixel Bender and now native plug-in by Bartek Skorupa.
Creating Motion Graphics is the best single resource for Set Matte information and includes tutorial and demo project files. A number of online tutorials use Set Matte; among the more interesting are Felt Tips' After Effects Quick Tips #4 and #5 Easy Luma to Alpha and Text Effects with Set Matte by Harry Frank.
Set Matte does exist in Premiere Pro, but it's for AE compatibility; the Track Matte Key effect does much the same thing and is hardware-accelerated (with CUDA at least). NLE Ninja has a tutorial using Set Matte in Premiere (at 26:26) and Eran Stern discusses how to overcome the limitations of the Track Matte effect using advanced tips and tricks in Compositing in Premiere Pro.