Vosotros is the informal way to address a group including the person you are talking to. In English, we do this in various ways: y´all, you guys, all you, you all, yous guys, etc - depending on the region from which we originate. Vosotros is similar; with usage varying geographically as with the English expressions. This verb form is generally only used in Spain, and using it anywhere else (Latin America, the Caribbean, and Mexico, for example) will attract some very funny looks. It is usually used in a very informal way to address a group of people and implies that not one of the persons in the group would deserve an Usted title in singular conversation. In all situations where vosotros is not appropriate, you would use ustedes to address more than one person.
However, vosotros is also used in some more formal written forms on both sides of the Atlantic. For example, Biblical passages typically use vosotros forms when the speaker is addressing multiple people. You will regularly see and hear vosotros in Biblical quotes wherever you are. Therefore, you may want to at least recognize the usage even if you don't know how to use it yourself.