Set is used before applying decals, helps prevent silvering as long as you already have gloss surface. Use Sol after the decal has been applied. This is used to soften the decal and get it to lay into panel lines and conform to slight curves. Once applied, the decal softens so make sure the decal is in the correct place or you risk damaging the decal. Having said that, I've read reviews where the builder use one or the other for both purposes and achieve good results.
I stopped using the 'Set' years ago, as i couldn't see any difference (in use, at least). I now just use 'Sol', applying a small drop to the decal after it's been in the water, and then more once on the model, if required.
As others have said, 'set' (blue bottle), then 'sol' (red bottle).
I have to say I have not found any real benefit of Microset over water in the initial application of a decal. All it does is make my fingers smell.
Microsol is a good decal softener, not too harsh but enough for most decals. I've only ever had it destroy one set in all the years I've used it, I wish I could remember which. I often make two or three applications to get recalcitrant decals to conform.
There is one critical difference between the two - "Set" does not break the surface tension of water whereas "Sol" does - Try this simple experiment - put a few drops of water onto plastic so that they form "dew drops" - Then get a couple of cotton buds - soak one in "Set" and apply it to one of the drops - nothing happens. Now try it with "Sol" - You should see the "dew drop" collapse into a slightly lower dome. That's because the surface tension has been "broken". So only use "Sol" when you are sure the decal is in the correct position, the action of "breaking tension" should have the effect of "sucking" the decal down onto the plastic. If you get any persistent bubbles or silvering of a decal try putting minute pinholes in it with the tip of a very sharp pin and then press down on it with a cotton bud loaded with "Sol" - it can often "suck out" the silvering effect or the air/water bubble. - It has worked for me before now, although its no substitute for making sure the surface is well prepared. Note that to get this effect Microsol must be used in conjunction with water - ie you must put your decal in water first and only apply Microsol after the decal is on the model - I've seen some people dip the decal in Microsol rather than water - that defeats the effect- as well as being hideously expensive!
I've been using both as directed, but I'm not sure what "Set" does. "Sol" smells strongly of acetic acid (vinegar) and frankly, it may be just that. I'm going to try using vinegar just for fun and see what it does. On the Typhoon project, the decals were so thick and stiff that I used "Set" "Sol" and Walther's Solvaset to get them to settle down. They ultimately did. And it was over a gloss surface.