Tool Palettes have been around for a while yet not many people are using it in their daily routine.  In my training classes the students are introduced to Tool Palettes when introduced to blocks (AutoCAD library components).  The blocks will reside on one of the tabs in the Tool Palette and you are able to drag and drop the blocks into the current drawing.

The tool palette is dockable so you are able to incorporate it into the AutoCAD frame ie. it is not floating on top of AutoCAD like the file open dialog box.

DOCKED 

UNDOCKED

To access the tool palette select the View Tab and click on Tool Palettes.

To move or scale the palette you would  go about it exactly the same way as you would move a normal windows dialog box.  Grab the edges and depending on where you hover the mouse, whichever icon pops up will allow you to move or scale the palette.

The Tool palette is a home for a variety of functionality not just blocks.  You can have your draw or modify commands, hatch commands as well as 3D objects like lights and cameras.

The Tool Palettes are saved locally but if you have components or special commands that you have created you can have the Tool Palettes sit on a shared network location and you will then be able to share with all the designers in your office.  You change the palette and then it will be updated for all the designers to see.