Preterite vs. Imperfect

The preterite is used to describe completed actions in the past:

Pasó una semana. - A week went by.
Hablé con el director. - I spoke with the director.
Hice mi tarea. - I did my homework.

The imperfect is used for ongoing past actions. These actions tend to be interrupted by another action. For example:

Caminaban por la calle cuando empezó a llover.
They were walking down the street when it began to rain.

Juan se bañaba cuando llegaste.
Juan was taking a shower when you arrived.

The imperfect is used to give background information which sets the stage for the principal action:

Era un día muy bonito, no hacía calor y había una brisa muy fresca.
It was a very nice day, it wasn't hot and there was a very fresh breeze.

Todos estábamos preocupados por el examen: Adolfo sudaba, Gabriel repasaba su tarea y Lupe no podía dejar de hablar.
We were all nervous about the exam: Adolfo was sweating, Gabriel was reviewing his homework, and Lupe couldn't stop talking.

Simultaneous actions are expressed with the imperfect:

Mientras pescaban, hablaban del partido de fútbol.
While they were fishing they talked about the soccer game.

When you want to refer to habitual past actions in situations that would require "used to" or "would" in English (e.g. I used to smoke; we would always meet at the arcade) use the imperfect in Spanish.

Yo jugaba tenis cada fin de semana cuando era niño.
I used to play tennis every weekend when I was a child.

Siempre hacíamos excursiones en bicicleta.
We would always go for bike rides.

If it is a verb which indicates a state of mind or feelings, rather than a change of state of mind, then use the imperfect:

Yo no me sentía bien. - I didn't feel well.
No sabíamos quien era. - We didn't know who it was.
Estaban muy enojados. - They were very angry.

Changes in one's mental state or feelings are expressed with the preterite. This is often expressed with the reflexive form and corresponds to "become + adjective" in English:

Me enfermé del estómago. - I became sick to my stomach.
Se enteró del error. - He found out about the error.
Te enojaste con el árbitro. - You got mad at the referee.

Meaning changes: There are some cases in which two distinct English verbs will be needed to express what can be conveyed by the use of the preterite and imperfect in Spanish. Remember that the preterite refers to the beginning or ending of an action and the imperfect refers to an ongoing condition. For example:

Conocí a Miguel en 1998. - I met Miguel in 1998.
Yo conocía a Miguel en 2000. - I knew Miguel in 2000.

Juan supo las noticias y se enojó.
Juan found out about the news and he got mad.
Juan sabía las noticias y estaba enojado.
Juan knew about the news and was angry.

Tuve que ir a la junta. - I had to go to the meeting.
Tenía que ir a la junta. - I was supposed to go to the meeting.