Milestones are your due dates.  They also allow you to group Actions within a Milestone so that you can easily filter the Action lists.  This allows you to focus on Actions that are required within that Milestone.  Milestones can be used to organize actions in many ways.  Some users organize Milestones by type of work, such as "Design", "Development", and "Testing".  Other users organize by version, such as (Version 1.0, Version 1.1, etc.).  It's up to you on how you use the Milestone feature, there are no hard rules.

Each Action is associated with a Milestone, but can also not be associated with a Milestone.  Associating an Action with a Milestone allows that Action to take on a default due date from the Milestone due date.  Additionally, the burndown chart that can be found in the charts page breaks down the hours remaining by the Actions within the selected Milestone.

A Milestone has a Name, Description, Start Date, and Due Date.

To create a new Milestone for a Project, simply click the "Create a Milestone" button at the bottom of the Milestone list.

To filter Actions by Milestone, select the Milestone using the Milestone dropdown found within the Menu section of the Project Page.