Work flows help in automating stuffs. How and where to use work flows in discretionary and depends on your business process.
Illustration: Suppose you wish to auto update Account (Customer) 'tax location' field.
You want update tax location field to 'international' if shipping country of the account is other than Australia.
Go to Set up > Process Automation > Work flow Rules > New Rule
Select the object 'Account', Give a name your choice, Select the evaluation criteria, for our example select 'created, and any time it's edited to subsequently meet criteria', Rule Criteria, Select 'Criteria are Met', select the field 'Account: Shipping Country', Select the Operator as 'Does Not Contain', and write the name'Australia' in the value field. Click 'Save & Next'
Click 'Add work flow action' button and select 'New filed Update'.
Give a name of your choice, Select the Object 'Account', Select the field to Update as 'Tax Location', Specify the field Value as - Specific Value- Select 'International' (Here you can select only those values which you have given in Tax Location pick list. To know more on Tax Location Refer Setting up Taxes) > Save
Then, click on Work Flow Rules in your left hand side bar, it will show the rule that you created, then click 'Activate' option.
Once the rule is activated, whenever you create or edit an Account (customer) 'shipping country' field to any name other than 'Australia', system will automatically update the tax location field as 'International'.
This is just one use case, you can use work flows for different kinds of automations depending on your business needs.