One way it is often used to remove unnecessary elements of an idea. A good example of this is the origin of life. We don't fully understand how the organic soup of the primordial Earth formed the first life (although we are getting closer). People have proposed the hypothesis that a alien species planted life on the Earth. To accept this hypothesis, we have to add the assumptions of the alien race, their knowledge of our planet, and we still have the problem of how they originated. Because of this, Occam's Razor would have us chose that it was a chemical process that gave rise to life. Occam's Razor is not evidence or proof for an idea, but it can tell us which is more likely to be correct.
Occam's Razor is also used incorrectly by many pseudoscientists, like ufologists. They say that the simplest answer to all of the blurry photos, crop circles, and anecdotal reports is that there are aliens visiting our planet. The mistake they make is that we can explain these things without making any new assumptions about our universe (for example people have admitted to hoaxing crop circles). The ufologists claim requires us again to add the existence of an alien race that is visiting the earth, a very large assumption.
If one idea is supported by more evidence then another, go with the evidence. If the evidence is equal, Occam's Razor is the tool of choice to decide which idea is more likely.