Power on Self Test
Power on Self Test is the main function of the BIOS. The test is conducted by the BIOS to make sure that no errors are found before loading of a hardware. In case of errors, the BIOS does not recommend loading of the hardware. However, if you somehow manage to skip or overwrite some files and install the hardware, your system might not work effectively. It is recommended to fix the errors first noted in the BIOS and then load the hardware.
In this function BIOS locates operating system first. If the BIOS is able to find a capable operating system, for example, it meets all specification required for installation of a software, it passes on the control to the operating system. This function is almost similar to the POST, that BIOS recommends you that the hardware you are trying load in your system can only be done if the system meets all the basic requirement and the hardware itself is safe to load. In case errors found in either system or the hardware, the BIOS will not recommend you lading of the hardware. You will need to fix errors and meet other minimum system requires before loading the hardware.
BIOS drivers are low level drivers that give your operating system complete control over the hardware. These drives are the main source of function for testing for errors and other problems in the system, before passing on the control of the hardware to your computer. Your operating system nevertheless posses the main control over the hardware after being installed, but if BIOS step is skipped, you might load the hardware with some errors in either your system or the hardware itself. This can cause problems in smooth operation of the hardware.
BIOS or CMOS Setup
They act as a configuration program, allowing you to fix errors in your system, change and configure your system and hardware settings. For example, you can change time and date etc. Both these setups are essential to make as many changes to your system settings as you like. You can also make changes to your hardware settings.