Recursion works best with what I like to call "fractal problems", where you're dealing with a big thing that's made of smaller versions of that big thing, each of which is an even smaller version of the big thing, and so on. If you ever have to traverse or search through something like a tree or nested identical structures, you've got a problem that might be a good candidate for recursion.
People avoid recursion for a number of reasons:
Most people (myself included) cut their programming teeth on procedural or object-oriented programming as opposed to functional programming. To such people, the iterative approach (typically using loops) feels more natural.
Those of us who cut our programming teeth on procedural or object-oriented programming have often been told to avoid recursion because it's error prone.
We're often told that recursion is slow. Calling and returning from a routine repeatedly involves a lot of stack pushing and popping, which is slower than looping. I think some languages handle this better than others, and those languages are most likely not those where the dominant paradigm is procedural or object-oriented.
For at least a couple of programming languages I've used, I remember hearing recommendations not to use recursion if it gets beyond a certain depth because its stack isn't that deep.
