What is a PDF Portfolio?

PDF Portfolios allow you to bring together content from a variety of sources (i.e., PDF, Word, Excel, JPEG files) into one unified container. Then, this container can be designed in a wide range of styles. For example, you may have a project that includes text documents, email messages, spreadsheets, CAD drawings, and PowerPoint presentations. You could combine all of these documents into a PDF Portfolio. The original files retain their individual identities but are assembled into one PDF Portfolio file. Users can open, read, edit, and format each component file independently of the other component files in the PDF Portfolio.

It very useful when you need to send users content from a wide range of sources to view.

They're used in many industries - you can see examples in our gallery at:
http://acrobatusers.com/gallery/pdf_portfolio

Here is a link to some additional examples from the education field:
http://www.adobe.com/education/products/acrobatpro/video-portfolio.php

So it's basically like a ZIPed folder (directory) where you can customize the background and how the icons representing the files appear (grid, etc.)?

Yes, but you don't need to go through the whole zip/upzip stuff and you can dress up the whole package many different ways.