When a recipe calls for butter, how do you know whether to use salted or unsalted?

Recipes will specify unsalted if that is needed. (Like flour; use plain unless the recipe calls for self-rising)  Unsalted butter is sometimes called for in recipes that have other ingredients with salt, like canned broth, soy sauce, self-rising flour, etc.  

Many professional cooks only use unsalted butter then add salt to the recipe.  That allows them to control how much salt their food will have. 

I don't think there is an industry standard that defines exactly how much salt is added to a lb of salted butter because some brands have a lot more salt than others.

Some cooks use unsalted butter in every recipe because of health reasons, like being on a low sodium diet, high blood pressure, etc.

I love the flavor of salted butter and use it in almost every recipe, even those that call for unsalted butter.   

Salt is added to the butter during production to extend it's shelf life.  If you want a "fresher" butter purchase unsalted.  You will also notice it is generaly wrapped in foil rather than waxed paper, this also seals out odors.  Given these two items alot of recipes will call for unsalted just to be sure that the butter is fresh and there are no lingering odors or flavors.  The other reason to call for unsalted is to be "in" or "gourmet"  so if the recipe is by a "chef" you can be sure it will call for unsalted. (not to mention they can charge more for it!)