Usted & Ustedes In Spain
Are usted and ustedes used often in Spain?
6 Answers
Sure... you can't always be informal when talking to multiple people, so if you were talking to say, two bosses in a formal work setting, you would still use "ustedes" in Spain.
The only difference is that in most Latin America countries, you would use "ustedes" for talking to groups of people, whether they were your friends or not.
And in Spain... "vosotros" = group of friends. "Ustedes" = any formal group.
And "usted" is still used in Spain for talking formally to any one person.
From my understanding of Spanish as a foreign (to me) language, usted is the formal "you" for one person. If you were talking to someone who is not your peer and whom you have just met, you would use usted with that person. You should always assume to use usted rather than tú until the Spanish speaker indicates that the familiar (tú) is acceptable.
Now for simplicity's sake think of ustedes as the plural you (2 or more people spoken to) under the same circumstances as you would use usted with one person.
Usted (abbreviated ud.) and ustedes (abbreviated uds.) are formal (non-peer, non-famliar) words for you singular and plural respectively.
To answer your question, usted and ustedes would be used as often as there arise formal situations of people addressing each other.
The history of these 2 words is interesting as well if you're a linguist.
Okay, I cannot handle this.
Jubilado is the only one who has it right. (edit to add, and now Tosh)
In Latin America, yes, ustedes is used whenever vosotros is called for.
But in Spain, vosotros does not replace ustedes as the plural of usted- they use ustedes for a group whenever it contains those people for whom they would individually use usted.
It is just that Spain has become so informal, that those occasions are not that common.
See this thread please:
In Spain they use "usted" for singular and "vosotros" for plural although sometimes I have heard use "vosotros" in singular but should it be "usted".
In Spain they use Usted for the singular polite form but vosotros for the plural form instead of Ustedes The familiar form:Tú is much more commonly used amoung friends! 
In South/Latin America they generally use Usted for the singular and ustedes for the plural form! In Argentina they use Vos but I don't know enough about how this is used to comment in any detail!
I am studying/receieving Spanish classes (to learn Castellano) via Skype (once a week) with a native Spanish teacher from Spain
Update: I copied and pasted what I have written in this post in Skype during my last class to allow my native teacher to check it and she agreed with it all, but added that in Spain most people tutear each other: that is, they commonly use tú with family and friends and only use Ud (singular form ) with strangers / people they do not know well or people in authority! Vosotros is used instead of Ustedes (plural form) but in Latin America they use Ustedes with family and friends as well as others they do not know well.
I am going to Spain tomorrow 30th July until sunday 10th August, as I mentioned in my recent post so please do not expect me to respond to posts on this forum after today I am sorry ..I will be too busy! 
The third person singular "Usted" form is used in all spanish speaking countries. However, the third person plural "Ustedes" form is not. If I were in Spain, I would use the third person plural "Vosotros" form. If I were in any other spanish speaking country, I would use the "Ustedes" form.
When I speak with my friends from Spain, sometimes I accidentally use the "Ustedes" form. For the most part, they understand what I am saying, however, it can sometimes lead to a little bit of confusion. The same goes for my Latin American friends with "Vosotros."
