We've gone over the various types of single increases, and I've shown you some of the pattern language that generally serves as a trigger that a certain type of increase is expected by the pattern writer. Now, let's talk for a bit about choosing increases when you don't have that guidance -- maybe the pattern just says, "increase X stitches in the next row," or "increase at each end every Nth row X times," or perhaps you're working up your own design, and not sure what kind of increase you'd like to use.
In general, it's best to suit your increases to your fabric. Stockinette, for instance, is such a smooth fabric that the little bar of a KFB-type increase really stands out. Sometimes this can be a design feature, but most of the time, it's probably a better idea on stockinette to use an M1-type or a lifted-stitch type of increase; no increase is truly invisible, just as no decrease is, but these fade into the background of the fabric more cleanly. As to the choice between M1 and lifted-stitch increases, that's largely personal preference; however, in those cases where the increases are matched against decreases (for instance, when you're doing waist shaping), I'd suggest the lifted-stitch increases, because they're the closest match to the decreases -- they have an "emerging from underneath" appearance that matches the "disappearing underneath" look of the decreases well.
On a textured fabric, such as seed stitch or ribbing, the texture of the KFB-type increases can blend in very nicely. In particular, where increasing out of ribbing into stockinette, the KFB is beautifully suited; if placed on the last stitch of the knit rib, the barred stitch blends into the purl rib almost invisibly (alternatively, mirrored-KFB can be placed on the first stitch of the knit rib, with like results). However, again, if you're matching increases to decreases, the lifted-stitch increases are certainly workable in a textured stitch, and they do match the decreases well.
Now that you've picked a type of increase, where do you put it? The two places where you see this kind of low-guidance instruction to increase are where you're increasing at one or both edges of a piece, or where you're just given a total number of increases to distribute within a row. If the placement is more complicated than that, you're generally told exactly where to do it.
Even when you're told to increase "at the edge," you will almost never want to place an increase directly on the edge of a piece, as this will give it a choppy appearance. Furthermore, if the edge is to be seamed, it's generally best to leave the edge stitch untouched to provide a clean selvedge for seaming. Leaving it untouched has slightly different implications for the different types of increase. For instance, if you're doing an M1, this type of increase tends to exert influence on the stitches on either side of it, and therefore it's probably best to place it two stitches away from an edge to be seamed, in a sequence such as "k2, m1, k to last 2 sts, m1, k2" (although you will see directions calling for only 1 edge stitch, at times; considerations such as the ease of incorporating stitches into a pattern may outweigh the desire to keep a clean edge for seaming). A KFB increase, on the other hand, only affects the stitch it's done into and to a lesser degree the stitch that's beyond the new stitch; it doesn't affect the stitch that remains adjacent to the original stitch. Therefore, a sequence such as "k1, kfb, k to last 2 sts, mirrored-kfb, k1" works nicely with this type of increase; a similar sequence works well with lifted increases, when a left lifted increase is done a stitch away from the right edge and a right lifted increase done near the left edge, but if you wish to use the right lifted increase on the right edge and vice versa, then two untouched stitches are advisable if you're going to be seaming.
When you're distributing increases evenly across a row, the biggest challenge for most people is to remember edge stitches. For instance, if one is distributing 4 increases across 20 stitches, it's easy to think, "Aha, I'll just divide by 4," and so one does "k5, m1, k5, m1, k5, m1, k...." and about this time, realizes that one is going to run out of stitches without having done the last increase. The trick is, when distributing X increases across Y stitches, divide Y by (X+1) instead of by X -- in this example, divide 20 by 5, not 4, so the sequence would be "k4, m1, k4, m1, k4, m1, k4, m1, k4" and the decreases would work out perfectly. If the number of stitches isn't evenly divisible by the number of increases, round down, do the division, and then add half the excess to each end. If you'd like that math done for you, Lucia Liljegren has a very nice calculator which will help you out.
Now, having given you a nice little rule of thumb, I'm going to point out some exceptions to it. First, if you're working in the round, the need to add edge stitches disappears; the initial example, with 5 stitches between increases, works out fine if that's a round of 20 stitches instead of a flat row, although it does put the final increase right at your round marker. Lucia's calculator can still be used, but will work best for work in the round if you use the unbalanced rather than the balanced calculation. Second, this calculation (and Lucia's calculator) assumes an increase that doesn't use up one of your existing stitches; if you're doing KFB increases, which do, you'll need to subtract one from each group of stitches except the last, to account for the fact that you'll use one up when you do the increase -- the sequence in the example would become "k3, kfb, k3, kfb, k3, kfb, k3, kfb, k4." Third, you may want to modify this distribution if you're working in a pattern stitch, to something that will mesh more nicely with the pattern. For example, as I earlier pointed out, KFB increases done on the last knit of a knit rib will blend very nicely into ribbing; making sure that each increase ends up in this placement is therefore probably more useful than making sure the placement is exactly even. This is probably easier to do by hand, by making a sketch that shows your number of repeats and then marking which ones you're going to do the increases on, rather than using a calculator and then modifying the output. With all these exceptions, you can see that there's as much art as science in evenly distributing increases, but this at least gives you a place to begin.
Next up, we'll talk about working increases into a pattern stitch, particularly ribbing and seed stitch since those frequently give people trouble.