I've seen a few mentions here and there of how to use TT, but no one thread dedicated to it. Having seen two excellent examples of how NOT to use it yesterday I feel inspired.
Behold: teflon tape. AKA thread seal tape, plumber's tape, polytetrafluoroethylene film. A great resource when used properly. A wasteful, frustrating nuisance when misapplied.
The first thing to know is when to use it. Teflon tape is used to fill in the gaps and lubricate tapered threaded fittings. These are fittings like PVC male adapters, drain plugs, and pressure gauge threads where the threads are providing a seal.
Teflon tape serves no purpose on union or lock-ring type connections which depend on an o-ring or some other gasket. The threads on a union, for example, are only used to provide compression to hold the flat surface on one side snugly against the o-ring on the other. Placing teflon tape on these threads would be useless since any water that leaked past the o-ring would escape out the other non-threaded side. This goes for ball valves with unions, most filter cartridge housings, spa heater unions, etc. In short, if there's an o-ring or gasket present there's usually no need for teflon tape.
Now that you know you've got the right application, how do you put it on?
Teflon should be wrapped in the same direction as the male threads. Wrapping the opposite direction will usually result in the tape coming unwound as you tighten the fitting. Start at the end of the threads, being sure not to go over the end as this may cause an obstruction. Wrap completely around twice to hold the end of the tape in place, and then work your way up the threads overlapping half the width of the tape as you go. Keep tension on the tape as you wrap so it is pulled completely into the threads. When you get to the end you should have two layers over the entire fitting, and the threads should still be clearly defined through the tape.
Usually two layers will be adequate. More than three or four and you risk breaking whatever female fitting you are threading into. Bad news since that's usually an expensive piece of equipment like a pump housing or a multiport.
Are there crusty old fittings in the world that require more than four? Sure! How do you find out? Try two layers first. If you find 2-4 layers isn't doing the trick, consider using pipe dope instead. Or even better, replace the worn out fittings!
Teflon tape should be removed and reapplied every time the fitting is taken out and put back into place. Also, be sure you're using the standard white stuff. While the colored versions are the same chemically, some are thicker than others and could increase your odds of cracking a fitting.