If you query the ADSM-L archives for "multi-session" and "collocation," you'll see the latter is definitely discussed more than the former — way more. Which is actually better for improving TSM restore speeds? This blog entry attempts to discuss the pros and cons of both, as well as what you need to do to activate either one.
Collocation minimizes the number of tape volumes that a given client's data is written to, and it's activated on the storage pool level. If the storage pool that you send a given client's backups to is collocated, then that client's backups will be collocated to the degree specified by that storage pool. The greatest degree of collocation is filespace collocation, followed by client collocation, then (as of TSM 5.3) collocation groups. The more you collocate, the fewer tape mounts will be required during restores. Unfortunately, the more you collocate, the more you negatively impact your media utilization and the more tape mounts you will need during backups.
Multi-session restore allows you to use multiple tape drives during a single no query restore (NQR). Since it can take several minutes for each tape to get mounted and positioned to the proper section of tape, using multiple tape drives can ensure that at least one tape drive (and potentially more) is always restoring data. Of the three usual suspects (TSM, NetBackup, NetWorker), TSM is the only backup product with this feature.
If a set of backup files is completely collocated and fit on one tape, you will not be able to perform a multi-session restore. (If all the backups are on the same tape, you can't mount multiple tapes.) This is why the two are seen as competiting concepts.
I would urge you to do your own testing, but it would seem that several (you can use as many as 10) tape drives spinning simultaneously during a restore would be faster than a completely collocated tape. Perhaps a good mix would be to combine multi-session restore with collocation groups. That way, you limit the number of tapes that a given client may send it's backups to, but allow multiple tapes to get created so that a multi-session restore would work.
The one challenge of multi-session restore is that the values you set to enable a multi-session restore also activate multi-session backup, which would greatly increase the number of tape mounts you would need during backups. Therefore, most people activate multi-session restores when they're about to issue a large restore.
To enable multi-session restore, follow the instructions in this checklist.