Hy Byron, please find below an explanation from a European perspective.
In Portugal, the use of tu/você varies between regions and according to the age/generation of the speakers.
The traditional rule was that "tu" was meant to be used when addressing:
1) People with whom you are intimate, such as spouses, siblings and friends.
2) People younger than you, especially children. Children are almost always adressed as "tu", and they treat each other by "tu", as do teenagers.
3) People who are your "hierarchical inferiors" (this use of "tu" may be seen as rude in some contexts, though).
However, times change. The rules above are not followed as rigidly today as they used to, and the social conventions that govern the use of "tu" are very much in flux in Portugal. There is some variation between regions, and a great deal of variation according to the age/generation and social status of the speakers.
"Você" is an even more complicated case. It started out as a polite form of address, but with time it devalued in Portugal, though not as much as it did in Brazil. Today, it tends to be reserved for addressing social equals with whom you are not intimate or people whom you don't know very well but don't feel compelled to address too formally. For this reason, some Portuguese people find "você" slightly impolite, and avoid it. However, other people don't seem to give "você" that negative conotation. Context is everything, here! To complicate things further, friends and workmates from older generations will often treat each other by "você" rather than "tu".