Stories You Track is a mod for efiction that is intended to be used when you are reading a story that is in progress. When you track a story, you'll see a link in your profile with a list of all the ones you are tracking. There will also be a date showing the last time you read the story - in case you forgot then you can compare that to the date the story was update to know if you missed out on an update or what have you.
Favorites was meant for stories that are already finished. You can use it either way.
There will be other little mods being deployed and a list of what they are and what they do will go out so everybody knows, at least that is the plan at the moment.