Using "vous" shows respect towards elder people or people one meets for the first time. It is used for example with teachers, higher ranked colleagues and salesmen.
"Tu" is used between members of a family, with friends or people the same age.
These are the most common uses of these two terms and should be considered as strong frames of reference. However, some exceptions exist: sometimes, family members use "vous" (in very traditional milieu) or employees will use "tu" with their employer.