when to use mvc vs mvvm code example

Example: mvvm vs mvc

MVC/MVVM is not an either/or choice.
The two patterns crop up, in different ways, in both ASP.Net and Silverlight/WPF development.

For ASP.Net, MVVM is used to two-way bind data within views. This is usually a client-side implementation (e.g. using Knockout.js). MVC on the other hand is a way of separating concerns on the server-side.

For Silverlight and WPF, the MVVM pattern is more encompassing and can appear to act as a replacement for MVC (or other patterns of organising software into separate responsibilities). One assumption, that frequently came out of this pattern, was that the ViewModel simply replaced the controller in MVC (as if you could just substitute VM for C in the acronym and all would be forgiven)...

The ViewModel does not necessarily replace the need for separate Controllers.
The problem is: that to be independently testable*, and especially reusable when needed, a view-model has no idea what view is displaying it, but more importantly no idea where its data is coming from.

*Note: in practice Controllers remove most of the logic, from the ViewModel, that requires unit testing. The VM then becomes a dumb container that requires little, if any, testing. This is a good thing as the VM is just a bridge, between the designer and the coder, so should be kept simple.

Even in MVVM, controllers will typically contain all processing logic and decide what data to display in which views using which view models.

From what we have seen so far the main benefit of the ViewModel pattern to remove code from XAML code-behind to make XAML editing a more independent task. We still create controllers, as and when needed, to control (no pun intended) the overall logic of our applications.

The basic MVCVM guidelines we follow are:
Views display a certain shape of data. They have no idea where the data comes from.
ViewModels hold a certain shape of data and commands, they do not know where the data, or code, comes from or how it is displayed.
Models hold the actual data (various context, store or other methods)
Controllers listen for, and publish, events. Controllers provide the logic that controls what data is seen and where. Controllers provide the command code to the ViewModel so that the ViewModel is actually reusable.
We also noted that the Sculpture code-gen framework implements MVVM and a pattern similar to Prism AND it also makes extensive use of controllers to separate all use-case logic.

Don't assume controllers are made obsolete by View-models.
I have started a blog on this topic which I will add to as and when I can. There are issues with combining MVCVM with the common navigation systems, as most navigation systems just use Views and VMs, but I will go into that in later articles.

An additional benefit of using an MVCVM model is that only the controller objects need to exist in memory for the life of the application and the controllers contain mainly code and little state data (i.e. tiny memory overhead). This makes for much less memory-intensive apps than solutions where view-models have to be retained and it is ideal for certain types of mobile development (e.g. Windows Mobile using Silverlight/Prism/MEF). This does of course depend on the type of application as you may still need to retain the occasional cached VMs for responsiveness.

Note: This post has been edited numerous times, and did not specifically target the narrow question asked, so I have updated the first part to now cover that too. Much of the discussion, in comments below, relates only to ASP.Net and not the broader picture. This post was intended to cover the broader use of MVVM in Silverlight, WPF and ASP.Net and try to discourage people from replacing controllers with ViewModels.