Look at it this way. Use "tu" when you are talking with your family, friends, people why are younger that you and basically anyone you are familiar with (that is meant my "tu is informal", it is used in informal SITUATIONS). Use "Usted" when you are talking to your teacher, you neighbor, the president of the country, people you see for the first time, people you know (but are not familiar with, that means they are not your friends), but are older than you and basically anyone you want to show respect to. BUT!!! For example, in Colombia, they use "usted" all the time... With friends, teachers, neighbors, etc... And they use "tu" almost never. In Argentine, instead of "tu", they use "vos" and the verbs for "vos" are conjugated for the second person plural "vosotros" without the 'i'. Vos sos - you are Vos tenés - you have Vos hablás - you speak Vos pensás - you think So, you need to learn the culture of the country to speak the language :D Hope this helped a bit, and if you have any more questions, feel free to ask me directly ;)

My little rule for myself after much confusion and insults and difficulties in Spain: If I would call someone Mr. Miss, Mrs. or Ms. ... blank... when adressing them, I use Ud. If I would call them by their first name, I use tú. If I don't know their name, I think to myself, well, if I DID know their name, how would I address them?

The difference is that "tu" is informal and "usted" is informal. "Usted" is often used when you want to treat somebody with respect (elder people) and when you talk with people you don't know or you're talking with your costumers. In Spanish, that word is very polite and I think that in a colloquial use, it's very strang to heard

IN SPAIN: - Usted: to be polite, oftenly used whith elderly people or when you don't know the person you're talking with. - Tú: informal. Friends, family (not always, some people talk to their parents with usted, it's not common though), children, colleages, acquaintances... In many countries of LATIN AMERICA they use "usted" for both, formal and informal. In Argentina they use vos (tú or vosotros).

Great question Tia. I'd like to know the answer also. The books says, Tu is informal and Usted is formal of... You. But what does that mean?