Pronto vs Ciao or Salve
When it is right to use Pronto?
From what I've heard and read, "pronto" is used as a greeting when answering the phone. It indicates you are "ready". Ciao is much more common, informal way of saying "hello" or "goodbye". Salve I believe is a more regional way of saying "hello", although I am not certain what areas it is native to.
Salve is actually an ancient greeting; the Romans used to say "salve atque vale" (be healthy and be strong) both as hello and as bye, kind of like ciao in current Italian. Nowadays salve is a moderately formal greeting, i.e. it's less friendly than ciao and less detached than buongiorno/buonasera; it's only used when meeting though, it doesn't apply when parting ways.
I only took two levels of Latin, but my understanding is:
When it was Latin, rather than Italian, salve meant greetings/hello/welcome as well as farewell/goodbye.
Ave atque vale (ave meaning something along the lines of "hail," more of a recognition of respect.) meant "hail and goodbye" - a phrase used to send off the dead respectfully. Salve wouldn't be used in its place logistically, but I suppose "ave" was more suited for military applications and "salve" for something less dire.
Yes, although not always; it works when addressing friendly someone you need to show respect to, or formally a mixed group (it works especially well in formal emails since it gets rid of the "timing" problem of buongiorno/buonasera), or simply when undecided on the level of formality to use in the greeting. Like all middle solutions it's popular with some people and avoided by others.