The words "set" and "affection" in this verse are the Greek word "phronema."  Phronema is usually translated as "mind" and refers to thoughts, feelings, and desires.  The most accurate translation would be thoughts.  In Colossians the word appears twice in the text for emphasis.  Thus, Set your thoughts! Think! Think! on things above, not on things on the earth.

In the New Testament the word "mind" is translated from three Greek words.  Phronema as explained above, psuche which means soul, and nous which refers to the whole mind.  If we are to live God's Word with all of our soul (psuche) and hold God's Word with all of our mind (nous) we must put the thoughts (phronema) of God into our mind by studying and thinking God's Word.  That which we think will be expressed in that which we say.

Acts 28:22
   But we desire to hear of thee what thou thinkest (phroneo):  for as concerning this sect, we know that every where it is spoken against.

The Jews in Rome asked Paul to tell them what he thought.  They had heard negative things about the movement of God's Word that Paul represented and they wanted to hear directly from him about it.  As we fill our minds with the thoughts of God's Word, we will speak that which we have seen and heard and make known God's Word to others.

Romans 8:5-7
   For they that are after the flesh do mind (phroneo) the things of the flesh; but they that are after the Spirit the things of the Spirit.
   For to be carnally minded (phronema) is death; but to be spiritually minded (phronema) is life and peace.
   Because the carnal mind (phronema) is enmity against God: for it is not subject to the law of God, neither indeed can be.

The thoughts which we hold in our mind, believe in our heart, and speak unto others have a powerful effect.  If we we think about things of the flesh (five senses, worldly thoughts) we bring death to ourselves and those to whom we speak.  If we think God's Word (spiritual thoughts) we bring life and peace to ourselves and to those to whom we speak.

John 6:63
   It is the spirit that quickeneth; the flesh profiteth nothing: the words that I speak unto you, they are spirit, and they are life.

Jesus Christ always spoke God's words and thus brought life to those to whom he ministered.  You can only speak that which you hold in your mind.  To speak God's Word as Jesus Christ did, we must continually feed our mind on the words of God.

Philippians 2:5
   Let this mind (phronema) be in you, which was also in Christ Jesus:

The Word of God exhorts us to have the same thoughts in our mind as did the Lord Jesus Christ.  If you want to know what Jesus Christ thought, you must read the record of his words and thoughts in the Word of God.  You must study the Word of God and believe what you read to have the thoughts of the Word.

When each believer in the Body of Christ puts the thoughts of the Word into his or her mind we become "like-minded" on God's Word and there are no divisions among us.

Romans 12:16a
   Be of the same mind [to auto phroneo] one toward another. . .

God wants us to have like thoughts.  To be of "the same mind" means to have the same thoughts, to be like-minded, or to think the same about God's Word and the things of God.  In the Greek "the same mind" are the Greek words "to auto phroneo" or literally "the same thoughts."  These words occur six times in the New Testament.

Philippians 2:2
   Fulfil ye my joy, that ye be likeminded [to auto phroneo], having the same love, being of one accord, of one mind [phroneo].

As we each think the thoughts of the Word we have the same thoughts.  We have unity of purpose.  We have the same thoughts.

Philippians 3:15-16
   Let us therefore, as many as be perfect, be thus minded (phroneo): and if in any thing ye be otherwise minded (phroneo), God shall reveal even this unto you.
   Nevertheless, whereto we have already attained, let us walk by the same rule, let us mind the same thing [to auto phroneo].

We are to press toward the mark of the high calling of God in Christ Jesus.  We are to focus on the goal and think the Word of God.  Spiritually we are already perfect, but perfection in our day to day walk is dependent upon our putting God's perfect Word into our thoughts.  As we each think the Word we become likeminded, having the same thoughts.

The Word of God also makes us a promise in this verse.  It says that if we do not have the perfect thoughts of God's Word in our minds that God will reveal even this to us via His Word or by way of the holy spirit which dwells within us.  That kind of leaves us without an excuse.  When we are off the Word, God will tell us.  So put on the Word of God.  Set your thoughts on things above and we will enjoy together as believers the life, peace, and perfection that believing God's Word brings.

II Corinthians 13:11
   Finally, brethren, farewell.  Be perfect, be of good comfort, be of one mind [to auto phroneo], live in peace; and the God of love and  peace shall be with you.