Title pretty much say's it all. Have no clue how to do a roll back and what it's used for.
It's one of the choices in the revision history of a post. There's a full description in the global meta FAQ.
The most obvious time it's appropriate to roll back an edit is when it's purely detrimental - some kind of vandalism, something that changes the meaning of a post, and so on. You can also use it for less drastic edits that you disagree with, though that usually makes much more sense on your own posts than on others. You shouldn't use it for things you just personally don't like as much, any more than you should manually edit to undo people's edits like that. Anything in between, use your best judgment, just as you would when editing.
The one thing you really don't want to do is use it to get into an edit war, with two people rolling back each other's edits. That's no good, and tends to draw moderator attention.