For the newbies out there, this question seems to come up often, so it might be worth repeating, especially because HLC documentation is very spare.
HLC stands for "HAI Lighting Control" but since HAI is now Leviton, maybe they should call it LLC.
I believe HLC was designed for installers to get a UPB installation up and running with much less work. UPB is a lighting technology, created by PCS, and it can do lots, but its only a tool, not the full solution. To created a full UPB controlled house can take LOTS of planning and coding work, so what HAI did, was created a standard install, and built additional code into HAI/Leviton switches and OMNI panels to support it.
HLC doesn't change UPB, it just adds an application layer above it. If you abide by the HLC rules, it rewards you by saving you time.
The "rules" dictate you number UPB devices a certain way, and you group them by "rooms" which can be physical or virtual. Rooms can be anything you like, but no more than 7 UPB loads per room. You add a "room controller" to each room, and it transmits links which set the room into scenes. For example, my Kitchen has a room controller with scenes "All On," "All Off," "Cooking," "Dining," "Normal," and "Party." Pressing the button sets the lighting scene in a room with one button.
The one "flaw" of UPB is that switches don't provide any status updates when they are going to a link lighting level. You can set them to report status when you manually change them, but when a UPB link changes them, no status. HLC attempts to correct that.
What does HLC provide for you? In "HLC Mode"...
1) The Omni Panel can completely program HAI/Leviton switches WITHOUT the need of UPStart. (Timesaver 1 for installers.)
2) The lighting levels of all the lights in a room can be changed in the room at anytime, by just a few taps on the room controller. UPStart is not required. (Timesaver for user and installer)
3) If you use the HAI/Leviton room and house controllers, the LED status of each room is updated correctly when any lights in the house are changed. Its easy to look at a house controller and see exactly which rooms in the house have lights on. You can look at a room controller, and see which scene is on. No coding is required for this. (Timesaver 3)
4) As mentioned above, a flaw of UPB is that switches executing a link don't report status. HLC has the panel poll the lights in a room when any are changed, so it knows all lighting levels, and can perform task #3 above. NOTE that UPB switch CAN report their status if this feature is turned on, but this only occurs when each switch is manually changed, NOT when a switch executes a link.
That is HLC in the Nutshell. As others have noted, you can use some HLC features on non-HAI/Leviton switches. Specifically you can do #4 above and have the panel poll switches for their status. A nice extra if your willing to live within HLC's restrictions. To get all the items #1 - #4 above to work, you need to buy Hai/Leviton switches and scene controllers, and of course, this was planned all along.
My guess is MOST professionally installed OMNI/UPB setups use HAI because its a timesaver, but I don't know for sure. This probably hurts PCS and Simply Automated since dealers going this way will buy HAI/Leviton switches. PCS recently added some HLC features to UPStart for their switches, but as of yet, they haven't added the HAI/Leviton switch firmware that also provide #1 - #3 above. Maybe a licensing deal is in the works as I'm sure they would like these switch sales.