by Dolus
As Steve mentioned, sell valuable cards separately if you want to make significantly more profit. I've had offers between $800 - 1400 for my collection, which I have more than made by selling off select valuable cards in my collection.Check out deckbox.org. I found this to be my favorite way to catalog my collection. It also provides pricing (and you can sort by pricing) to quickly root out your valuable cards, and if you wish, you can add info on set, condition, qty, etc. of each card. As far as pricing goes, their prices are greatly inflated and I would check eBay completed listings for realistic card values, but it gives you a general idea that you should sell your mana crypt separately, but keep your chimney imp in with the bulk collection.
For organizing, I did a poor job of this myself, but did what worked best for me. I basically sorted by rarity, then color, then alphabetical. So all sets are together.
A much better solution for what most people want, unless you have a small collection, is to sort primarily by set, as you suggested. I can't recall how my FLGS sorted their cards, but copying them is probably the best idea. Without knowing/remembering how retailers sort their cards, I would suggest by set, then rarity, then color, then alphabetical. I would keep most everything in a box, sleeve rares and expensive cards (say >5, or whatever you consider a high price).
When it actually comes to selling them, the real money is in selling individual cards. See if your FLGS is paying a decent price for specific cards you have. If not, check websites such as CardKingdom.com. They're the only site I've sold to because they offer a really good price and accept a lot of different cards and actually pay for them. When you get to the point where you're selling bulk cards, whether it's 300 cards or 3000 cards, you'll be getting chump change relative to the number of cards you're selling. You can probably make significantly more on eBay compared to the pocket change a retailer will offer, but shipping is a hassle and expensive with a lot of cards.