C&R is a broad classification which covers all the types of guns which you can purchase with a Type 03 Federal Firearms License issued by the Bureau of Alcohol, Tobacco, and Firearms. In most states, C&R license holders don't have as much paperwork or transfer fees to deal with as normal purchasers when purchasing military surplus firearms. The C&R license does not, however, result in any different treatment when dealing with non-C&R weapons.
Most of the C&R weapons presently for sale are Milsurps salvaged from a rusty or fiery death in some UN disarmament treaty.
Things a C&R License Is and Isn't
A C&R license does permit you to act as an FFL, in acquiring and disposing of C&R weapons in the pursuit of furthering your own collection. That having been said:
A C&R license does not empower you to buy C&Rs specifically for friends, even as gifts.
Although you have the power to receive and to dispose of C&R firearms, you are not to serve as a "transfer dealer" for someone else's orders.
You may trade C&R weapons, where otherwise legal, with licensees and non-licensees, in the pursuit of your own collection.
You may dispose of less desirable specimens towards the end of perfecting your own collection. Although many people appear to run businesses on C&Rs at gun shows this way, it's a serious violation if the ATF decides to pursue you.
Open Questions for the ATF
If anyone has a solid answer, based on an ATF letter, for these questions, I would love for you to email me! I heavily prefer scans of the original ATF letter or relevant sources, however, as it gets out of the territory of "well, you just heard that from someone who heard it from someone".
May a C&R holder order several "varying condition" rifles, keep the best, most historically valuable weapons for his/her collection, and dispose of the remaining rifles at cost? This practice appears to be in keeping with the objective of a C&R (obtaining the most desirable historical specimens for the private collection), and allows a degree of "hand-select" which is otherwise unavailable on bulk rate mail-ordered C&R firearms.
A C&R holder may trade firearms with a C&R holder or a non-C&R holder, in the pursuit of a desired C&R specimen. If person A is willing to trade C&R rifle A for C&R rifle B, may a C&R holder order a specimen of C&R rifle B in order to trade it to person A for C&R rifle A? Does the answer change if the trade is not straight-across, and cash accompanies the trade on one side or another? My guess would be that if the C&R holder is receiving cash, this may be a little too close to dealing for profit.
Obtaining your C&R License
You must order the form from the ATF, which will be mailed to your address. There is no charge for this service. At the ATF's forms order page, you will need to request "F7CR 5310.16 Application for License (Collector of Curios and Relics) Under 18 U.S.C. Chapter 44, Firearms". When your form arrives, follow the instructions to complete it.
A C&R holder has no obligation to log the acquisition or disposition of non-C&R firearms. Refer to the article on FFL Logbooks for instructions on obtaining and filling out your log book.
Fringe Benefits of a C&R License
Many retailers offer discounts to C&R licensees. Check this article for a non-exhaustive list.