well it’s not neccessary to understand octrees as such.
but as simple example. lets say you have a city with 30000 polys in it.
if you have it in one node the collision algorythm would do 30000 collision checks against your colission object (e.g. sphere)
if you put it in octrees the scene will be split into cubes. each one contains 8 more cubes and so on.
using this system you can skip tons of tests cause you most polygons are somewhere totaly else.
so with octree you do about 8+8+8+8 checks until you reached the box you’r in. then in your block there might be about 7 or 8 triangles… makes roughly 40 collision checks instead of 30000.
thats only an example but it works very simmilar to it. depending on your scene the speed of collision checks can increase a lot.
if you wanna know how to use it… hm… well i never tried it myself 
in this case you better ask in the octree-script-thread