PC mode is grouping your console to show all of your PCs with clients installed. You will be able to place policies on groups of PCs, as well as setup your reports to run by selected PCs.
PC mode is good for your basic office setup, where users are staying static on a one or two PCs and will always need the same policies in place.
User mode is grouping your console to show all of your windows user accounts. You will be able to place policies on groups of individual user accounts, as well as setup your reports to run by selected users, regardless of the PC they have logged into.
User mode is good for larger facilities where users need different policies, but they may rotate to many different machines. You can set group policies directly on their windows logon account, regardless of which PC they go to, the policies will stay in place.