A lot of SharePoint users are confused about when to use Content Approval and Major/Minor versions. And indeed, some functionality seems to overlap, especially the fact that you can hide draft/pending items from users with read access to the list/library.
Some considerations:
- Think about your user: the more advanced the options you activate, the more complicated it will be to have something published in the library. And what happens if it is complicated? Yes, the file ends up on the C: drive or in the e-mail.
- Content approval can be interesting in lists, as you do not have Major/Minor versions in lists, only in document libraries.
- If you are using Content Approval and you need to approve an item, you need manage list permissions. The Approve items is for Major/Minor versions, and has nothing to do with content approval!