When working with a SCM system, when should you branch?
It also depends on the SCM tool you are using. Modern SCMs (git, mercurial, etc.) make it increasingly easy to create and destroy branches whenever needed. This allows you to, for example, make one branch per bug that you are working on. Once you merge your results into the trunk, you discard the branch.
Other SCMs, for example subversion and CVS, have a much "heavier" branching paradigm. That means, a branch is considered appropriate only for something bigger than a twenty-something-line patch. There, branches are classically used to track entire development tracks, like a previous or future product version.