Relations between interparticle effective interactions, structure formation, stability and sedimentation for a colloidal system are presented in this paper. For a binary mixture of large and small particles, the potential of mean forces between large particles is obtained from the Orenstein-Zernicke equation. We incorporated the small particles in our numerical simulations by using this potential of the mean force as the interparticle effective interaction. Our numerical results reveal the phenomenon of strong particle aggregation due to the attractive depletion force exerted by small particles. In the absence of the effect of gravity, this aggregation can result in flocculation and the formation of particle clusters thereby forming "void" structures, while under the influence of gravity, the aggregation can greatly affect the sedimentation rates. An analytical expression relating the aggregation number to the sedimentation velocity is presented. Our sedimentation experiments with a bidisperse latex suspension as well as clay particle dispersions show both the destabilizing and stabilizing effects of small particles, which are in qualitative agreement with our theoretical predictions.