Sentinel is needed to update the master database and firmware. It can be used to create Favorites Lists, importing the data from the master database, or from scratch if you have all the needed info to do so. There is nothing fancy about Sentinel Favorites Lists. Sentinel cannot do virtual control.
Third party software, such as ARC by Butel or ProScan can create Favorites Lists and import directly from the RR database if you are a premium subscriber. These Favorites Lists can be a little fancier. ProScan and ARC (Pro) can do virtual control. They cannot update the master database or update firmware.