Types of "You"
Do usted and tú mean something different? I have been wondering why they are both used. Is usted the more formal way to say you, whereas tú is less formal?
Yes, tú is the casual/informal way of talking to one person in the 2nd person "you" form. So it would be used with friends and family members or people younger than you. Usted is more formal and would be used with strangers or in more formal/professional settings or to be respectful, especially of someone older than you. The same is true with the plural forms vosotros and ustedes. Spain most commonly uses vosotros to address a group of "you all" casually, while most other countries don't use this form. Ustedes is used to say "you all" more formally or politely (or in countries like Mexico is the only form used for casual and formal alike).
In Shakespeare's plays you will see words like thee and thou. This was the equivalent to tú and suggested intimacy or superiority, so you would use this form with your family members, close friends and children, servants and pets. It could also be used if you wanted to insult someone. The Usted or "you" form would be used with people you didn't know very well or wanted to be polite towards, you would certainly use it to your boss and your teachers. My impression is that in mainland Spain the tú form is becoming much commoner in the workplace and socially, however if the police pull you over for speeding it would be safer to use usted.