Ultimately, standing will deliver more power but use more energy, so stay seated as long as you can... having said that, it's good to stand on longer times for short intervals to use different muscles and rest others.
Also, really really steep hills can mostly only be climbed standing......
I normally stand for steep hills, but of late I try to sit as long as I can to build up those muscles, and then if needed stand for the end. It has made a difference to my ability and willingness to head into the hills. I tend to rely much more heavily on the hamstrings to pull you up the hill when I am seated.
For those out there with much more experience, I am happy for the feedback if this is counter productive.
If i can keep the cadence high enough, at a speed i'm happy with, then i'll stay seated. if i feel that my cadence is starting to plummet then i'll get out of the saddle and try to push my cadence back up then sit again.
as already stated.. really steep hills give you no real option but to stand until you reach the top :)
You might be suprised. The lightness of the bike and the frame geometry make a difference.
Practice standing on moderate climbs where you could manage to stay seated.
Try not to stand if someone is right on your back wheel without letting them know, you'll often slow down as you stand and you don't want to touch wheels.