As an undergraduate, I believed that when citing information from various sources, I should use both quotes and paraphrases more or less equally. However, in most research essays, the use of paraphrase should greatly outweigh quotes. This should be obvious because most often your citation should be a summary of a research finding; you are condensing many words into a few. The other main reason to cite as a paraphrase is that you are using a source to verify a fact. You should only be using a quote when you have a good reason to do so.
I often see people putting quotation marks around a fact because the specific word appeared in the source material. This is not necessary. If you want to cite a fact, then use your own words and the actual data without a quotation mark. I also see quotations of sentences where the content is neither extraordinary nor of particular value. These should be paraphrased instead. There is no benefit to quoting material just because someone of authority said it.
An APA style blog entry reminds us that we should quote only when the wording is unique or original, for example when the author is preeminent in the field or is the originator of a phrase that is now commonly associated with the field of study. It also points out that it is essential to be accurate. I always proofread quotations carefully in papers I edit, but unless it's an obvious typo, I usually end up flagging problems for the paper's author to double check. Quotations must be accurate down to the punctuation. (By the way, closing punctuation should be inside the quotation marks for U.S. style essays; it depends on the original source for U.K. style essays.)
If you find occasion to quote, remember the rule of 40. Quotations that are more than 40 words long should be set as a separate paragraph indented 1/2 inch from the margin. It remains double spaced; however, the citation comes after the closing punctuation. Note that all direct quotations need a page number. If you are citing a source without pagination, use a paragraph number (you may have to count them yourself).
Of course, if you are writing in the arts, you should be quoting a literary work extensively, since your purpose is to explain the text. However, the rules for citing other writers still apply.
For other APA essay writing tips, check here.