Maybe it would help to see a mathematical example of how relative state works?
The simplest example, I think, is the quantum state of a qubit and the relative state of its "spin around the z axis".
The state space of a qubit can be described geometrically as the unit ball. The surface, called the
Bloch sphere, is the space of pure states -- the ones you're most familiar with as being described by kets in a Hilbert space. For any unit vector
v, the point on the sphere it describes represents the qubit state "spin-up along the
v-axis".
In this geometric picture, (convex) linear combinations are interpreted in the sense of classical statistics. If P,Q are two points in the unit ball, then aP + bQ is the state that represents a statistical distribution of being in state P with probability a, and state Q with probability b.
The relative state "spin around the
z axis" can also be represented geometrically as the interval [-1, 1]. The two endpoints 1 and -1 (the "surface" of the interval) represent "spin up" and "spin down" respectively.
The relationship between the two is the straightforward one: if (x,y,z) is the state of a qubit, then the state of its subsystem "spin around the
z axis" is simply z.
Now, "spin around the
z axis" is actually really, really simplistic -- it's actually a classical system, and even with a unique choice of 'basis' states! It's a particle that's in a statistical distribution over the possibilities "up" and "down". If we're studying this subsystem, it makes sense to call these two possibilities worlds.
Now, suppose the qubit starts at the North pole -- the state (0,0,1). Let's assume the qubit is a closed system. Time evolution, according to Schrödinger's equation, will move this state around the surface of the sphere -- the state is always a pure state! There are no worlds or anything, there is simply "which axis am I oriented around now?"
But, we might be interested in looking how the "spin around the
z axis" subsystem behaves while all of this is happening. It starts off in the "up" state. But as time progresses, it slides back and forth in the interval. The state of this subsystem is (completely) described as being a weighted mixture of the two worlds "up" and "down", the specific weights depending on just where in the interval it is.
Other relevant things are that any operator (acting on the Hilbert space) in the {|z+>, |z->} basis can also be interpreted as acting on the "spin around the
z axis" subsystem. e.g. any measurement operation can be described in terms of having some value on the "up" state, and some value on the "down" state, and that's all there is to it. If time evolution was diagonal in that basis, then the state of the "spin around the
z axis" subsystem would evolve in a purely classical fashion. In this case it's a rather boring fashion, since "up" can only evolve to "up" and "down" can only evolve to "down", but in general it would be more interesting.