Deciding on a point of view (or POV) is one of the first decisions I must make when I prepare to write a new story. It's usually an easy decision; the story will suggest how, and through whose eyes, it needs to be told. Each POV has its advantages, but they also come with certain limitations.
First Person POV stories are told as if they are memories of the main character. They use the "I" pronoun (I had an adventure yesterday. "It was wild," I said), and give you a detailed look inside the main character's mind. It's like you telling a friend about something that happened to you.
Third Person POV stories are like the stories you tell about someone else. They use "he" and "she" pronouns, and offer a great deal more freedom. What do I mean by freedom? That depends on the type of third person POV you use. I'm a big fan of Third Person Limited Omniscient, where you stick with one character throughout the story and describe what happens around them. I wrote Epoch that way. It allows you to describe things as an outside observer, instead of a character in the thick of the story.
With Limited, however, you are still restricted to your main character. You can't go describing what's happening to another character, not until the main character is there to observe it. That way, the reader discovers things only when your hero does.
Actually, that's not entirely accurate. You can have multiple POV characters in a Limited Omni story, but each character has his or her own section. A section(not a technical term) can be as long as a chapter or as short as a paragraph. Within that section, the POV character is the focus, and you can't switch to another character's POV without ending the section(with, say, a chapter break or a space between paragraphs) and beginning a new one. That way, the reader understands they are now going to hear from someone else.
Some writers find this too restrictive, which is why there is also Third Person Omniscient. With Omniscient, you are like God - all-seeing and all-knowing. You can jump into and out of any character's head, and be anywhere in your story's world at any time. It presents the ultimate in freedom for a writer.
So why don't all writers write in Third Person Omniscient? Because it can be too much of a good thing. (Ooh! Did you notice how I started that last sentence with "because"? My English teachers would be so mad at me!) Too much freedom can dampen the story's focus, especially if you don't know exactly what you're doing. Not always, of course, but I don't fully trust myself with that much power. I write better when I have a few limitations.
Some POVs suit certain stories better than others. For example, I started writing EVIL? in Third Person, but realized it would work a lot better if it was in First Person POV. I had to rewrite Chapters 1 and 2, but the book was all the better for it.
So there are my thoughts on POV. I'll probably have more to say later. Times when I went wrong, for instance. You'll love that.