In regards to Step Events, you might sometimes want an event to happen after so many steps in an area. As an example, I frequently put "flavor" encounters in my modules when a player walks through a town, where they encounter NPCs or witness things happen. I don't always want these things to happen in predetermined locations, so they might have a 50% chance of happening every 20 steps or so. This adds a lot of random flavor into the module.
Another option is that you might have a dungeon where, for example, someone has to clean out 12 roaming bands of orcs. Instead of having them in predetermined locations, you could approach it by having a step event every 15-20 steps with a percent chance of it firing. Eventually, the party will find all 12 roaming bands of orcs, especially if you build your events so that it tracks how many of them they have encountered (and I would also make each encounter different as well, but that's just me). As a result, the player can search all squares of the dungeon and still not find all 12 orc bands, and it gives them the sense that they are moving around and the dungeon is alive with activity.
These are all personal design choices, of course, but you shouldn't limit yourself to just one way of thinking when it comes to building a module.
But, on to Quest Stage events...
Quest Stage events are fairly easy to understand. The real issue is that the documentation doesn't explain them to you and neither does the information inside the game. Once you understand how they work, they will become a powerful tool that you will wonder how you got along without.
Let's say that you have a group of quests that the Mayor of a local village wants to give out to the party. He first wants them to kill a goblin chief. Then, he wants them to deliver a message to one of his forest scouts. Then, finally, he wants them to confront a dragon and kill it. He will reward the party after they do so.
If you don't understand Quest Stages, you probably figure the best way to do this is to have the party return with the "Goblin Chief's Head," which will be a special item. Then you will give them a special item called "Private Message" that they must deliver, and maybe even have them gain a "Dragon Scale" special item when they kill the dragon. Or, if you use Quest Events, you might give them Quest 1 when they kill the goblin, Quest 2 when they deliver the message and Quest 3 when they defeat the dragon.
And all of that would work. But, it uses a lot of resources that you might need later in the module (especially if it's epic in scope). Using Quest Stages, though, you could do all of this by just using Quest 1.
Quest Stages occur in order (there are ways to alter that, but that's an advanced topic for another time, so for now just focus on them happening in perfect order). So keep in mind that: Quest 2 - Stage 4 will not fire until Quest 2 - Stage 3 has fired, which will not fire until Quest 2 - Stage 2 has fired, which will not fire until Quest 2 - Stage 1 has fired. If you step on the square where Quest 2 - Stage 4 is located and you haven't encountered Quest 2 - Stage 3 yet, FRUA will ignore it. It will wait patiently until the condition becomes true, even if it never does.
So, using Quest Stages, our example quests above would look like this:
Quest 1 - Stage 1: Mayor asks party to kill goblins.
Quest 1 - Stage 2: Party finds and kills goblin chief.
Quest 1 - Stage 3: Mayor rewards party and asks party to deliver a message.
Quest 1 - Stage 4: Party finds the recipient and delivers the message.
Quest 1 - Stage 5: Mayor rewards the party and asks them to kill the dragon.
Quest 1 - Stage 6: Party locates the dragon and kills it.
Quest 1 - Stage 7: Mayor rewards party and says he has no more for them to do.
Doing it this way, we have done a couple of important things:
1) We have made it so that we have only used one resource in the module (Quest 1). We didn't have to use Special Items or more than one quest.
2) We have set things up so that they happen in order. Players can't kill the dragon before they deliver the message. They can't deliver the message before they kill the goblin chief. Maybe all these things are related. Let's say the message the mayor sent to his scout was about the goblins being in league with the dragon and he needed a return message from the scout to know where the dragon was located. By keeping things from happening out of order, we make sure that the party can't encounter the dragon before all the other steps occur.
3) We know that all "Quest 1" stages deal with the missions given by the Mayor. If we had another story where the party was taking missions from the local Warrior's Guild, those could be "Quest 2." Missions from the Wizard's Guild might be "Quest 3" events. And events given to you by Farmer Brown could be "Quest 4." Each of these could have multiple involved steps.
Quest Events also have additional settings that can change the course of the game. You can make a Quest set to Failed or Completed. Then, events can fire based upon that, which is why events have the conditional: "IF QUEST HAS FAILED" and "IF QUEST IS COMPLETE."
Quest Events can fire without the player even knowing. For example, once the player has killed the Goblin Chief, I might want to advance the stage without asking them a question or without them knowing. I would set the Quest Event to "ACCEPT: AUTOMATIC (NO QUESTION)," which means it does not ask them a YES/NO question about whether they want to proceed. Then, on the next page, I put any events that I want to occur as a result of this Stage firing into CHAIN ON ACCEPT, so that they fire only one time, since this is the only time that Quest Stage will be true (again, there are ways to alter this, but unless you're trying to alter it, it will always remain true). See the screenshots below for more information.
So, for example, if I want to make sure the players can't encounter the Goblin Chief until the Mayor gives them the mission, I would put the encounter and combat with him in the CHAIN ON ACCEPT chain within Quest 1 - Stage 2. That way, if they reach the goblin caves before talking to the Mayor, they won't encounter the Goblin Chief.
I probably babbled a lot. I'm willing to clarify anything you want or answer any questions. If this has given you a basic understanding, I suggest loading up FRUA and throwing in some example events to test it out on a single map (that's actually how I figured it out). Hope this helped.