What are outlines?
Each outline article is a list of a subject's topics arranged hierarchically to show the relationships between them: those that are the most important, general entries and those that give more specialist detail. Outlines show the structure of articles about a subject, opening a whole new way of navigating it. They could be considered Wikipedia's equivalent to Brittanica's Propædia.
Why have outlines?
Each outline is intended to help the reader become familiar with the subject it presents, and also serves as a table of contents or site map to that subject's coverage on Wikipedia. Outlines are different from portals or indexes. While a portal focuses solely on well-developed featured content, an outline's main purpose is to direct readers through a subject's related articles. Indexes are intended to be comprehensive alphabetical lists of articles related to subject, but finding something in an alphabetical index can be difficult if one does not know the article title (and if one does, one hardly needs the index). Outlines might not list every article in a subject, and often their links lead to lists or other outlines to provide further detail. For an example, compare Portal:Japan, Index of Japan-related articles, and Outline of Japan.
A more detailed discussion can be found here
An example of when an outline would be helpful
Many new benefits can be gained by having outlines. Firstly, outlines list articles related to the subject that the average reader may not know exist. As an example, let's think of a reader interested in looking up the color of water. Instead of reading the entire article, if the reader looked at the outline, it would clearly list that there is a whole article dedicated to the Color of water, which the reader would have no way of knowing existed. Furthermore, it would also list that Wikipedia has three separate articles on water: Water (which explains water as a life necessity and daily use), Water (properties) (which explains water as a chemical and its properties), and Water (data page). None of these can be accessed reasonably from portals nor alphabetical indexes. Readers attempting to find what they are actually looking for may find it overwhelming since they can only search for what they know exists. This is where Outline of water would come in perfectly by providing another navigation method.