How to decide when to use Node.js?
You did a great job of summarizing what's awesome about Node.js. My feeling is that Node.js is especially suited for applications where you'd like to maintain a persistent connection from the browser back to the server. Using a technique known as "long-polling", you can write an application that sends updates to the user in real time. Doing long polling on many of the web's giants, like Ruby on Rails or Django, would create immense load on the server, because each active client eats up one server process. This situation amounts to a tarpit attack. When you use something like Node.js, the server has no need of maintaining separate threads for each open connection.
This means you can create a browser-based chat application in Node.js that takes almost no system resources to serve a great many clients. Any time you want to do this sort of long-polling, Node.js is a great option.
It's worth mentioning that Ruby and Python both have tools to do this sort of thing (eventmachine and twisted, respectively), but that Node.js does it exceptionally well, and from the ground up. JavaScript is exceptionally well situated to a callback-based concurrency model, and it excels here. Also, being able to serialize and deserialize with JSON native to both the client and the server is pretty nifty.
I look forward to reading other answers here, this is a fantastic question.
It's worth pointing out that Node.js is also great for situations in which you'll be reusing a lot of code across the client/server gap. The Meteor framework makes this really easy, and a lot of folks are suggesting this might be the future of web development. I can say from experience that it's a whole lot of fun to write code in Meteor, and a big part of this is spending less time thinking about how you're going to restructure your data, so the code that runs in the browser can easily manipulate it and pass it back.
Here's an article on Pyramid and long-polling, which turns out to be very easy to set up with a little help from gevent: TicTacToe and Long Polling with Pyramid.
Reasons to use NodeJS:
It runs Javascript, so you can use the same language on server and client, and even share some code between them (e.g. for form validation, or to render views at either end.)
The single-threaded event-driven system is fast even when handling lots of requests at once, and also simple, compared to traditional multi-threaded Java or ROR frameworks.
The ever-growing pool of packages accessible through NPM, including client and server-side libraries/modules, as well as command-line tools for web development. Most of these are conveniently hosted on github, where sometimes you can report an issue and find it fixed within hours! It's nice to have everything under one roof, with standardized issue reporting and easy forking.
It has become the defacto standard environment in which to run Javascript-related tools and other web-related tools, including task runners, minifiers, beautifiers, linters, preprocessors, bundlers and analytics processors.
It seems quite suitable for prototyping, agile development and rapid product iteration.
Reasons not to use NodeJS:
It runs Javascript, which has no compile-time type checking. For large, complex safety-critical systems, or projects including collaboration between different organizations, a language which encourages contractual interfaces and provides static type checking may save you some debugging time (and explosions) in the long run. (Although the JVM is stuck with
null, so please use Haskell for your nuclear reactors.)Added to that, many of the packages in NPM are a little raw, and still under rapid development. Some libraries for older frameworks have undergone a decade of testing and bugfixing, and are very stable by now. Npmjs.org has no mechanism to rate packages, which has lead to a proliferation of packages doing more or less the same thing, out of which a large percentage are no longer maintained.
Nested callback hell. (Of course there are 20 different solutions to this...)
The ever-growing pool of packages can make one NodeJS project appear radically different from the next. There is a large diversity in implementations due to the huge number of options available (e.g. Express/Sails.js/Meteor/Derby). This can sometimes make it harder for a new developer to jump in on a Node project. Contrast that with a Rails developer joining an existing project: he should be able to get familiar with the app pretty quickly, because all Rails apps are encouraged to use a similar structure.
Dealing with files can be a bit of a pain. Things that are trivial in other languages, like reading a line from a text file, are weird enough to do with Node.js that there's a StackOverflow question on that with 80+ upvotes. There's no simple way to read one record at a time from a CSV file. Etc.
I love NodeJS, it is fast and wild and fun, but I am concerned it has little interest in provable-correctness. Let's hope we can eventually merge the best of both worlds. I am eager to see what will replace Node in the future... :)
I believe Node.js is best suited for real-time applications: online games, collaboration tools, chat rooms, or anything where what one user (or robot? or sensor?) does with the application needs to be seen by other users immediately, without a page refresh.
I should also mention that Socket.IO in combination with Node.js will reduce your real-time latency even further than what is possible with long polling. Socket.IO will fall back to long polling as a worst case scenario, and instead use web sockets or even Flash if they are available.
But I should also mention that just about any situation where the code might block due to threads can be better addressed with Node.js. Or any situation where you need the application to be event-driven.
Also, Ryan Dahl said in a talk that I once attended that the Node.js benchmarks closely rival Nginx for regular old HTTP requests. So if we build with Node.js, we can serve our normal resources quite effectively, and when we need the event-driven stuff, it's ready to handle it.
Plus it's all JavaScript all the time. Lingua Franca on the whole stack.