I'm reading a guide for Pokémon Blue, and it says I should save my Rare Candies for "later". Why should I save them and when should I use them?
There's two general reasons to save Rare Candies for later.
It takes more experience to gain the higher levels. As such, if you use Rare Candies on the early levels, you're pretty much wasting them as the experience they'd be worth on a higher level Pokémon is far greater than on a lower level one. Especially as you don't generally encounter Pokémon higher than level 70, which means your experience income doesn't quite reach all that high.
Your Pokémon gain bonuses to their stats based on fighting other Pokémon. This is what makes the whole "Trained pokémon are stronger than wild pokémon of the same level" point, is from this stat bonus. Generations 1-4, however, this stat bonus can only be realized when leveling up during actual battle. The system was changed in Generation 5 but this "must level during battle" factor is present in Blue.
The amount of bonus stats you can gain does have a cap, though. If you've been thoroughly training a Pokémon since the lower levels (or if you just fed them a bunch of stat-raising vitamins, which correspond to the bonus stats), you'll probably have hit that cap by the time you should start using Rare Candies.
In general, the above basically means to train your Pokémon very well, and generally only use Rare Candies when you've gotten to such a high level that reaching the last levels is a taxing process. By that time, you should have maxed your bonus stats (unless you caught them at a particularly high level).
I often save and use Rare Candies for specific tasks or objectives. I do so because once a Pokémon is a high enough level there are far fewer compelling reasons to level the Pokémon. (E.G., if yours is a level 90 and you rarely encounter any Pokémon in the game above level 40 or 50, what's the point?)
As an example, I'm currently planning on using a couple to level a Pokémon exactly to level 40 so that I can use a repel and catch a roaming Pokémon at that level while not being harrassed by anything lower than that.
Personally, I used it as a way to revive PokéMon when I would run out of revives. As stated above, using Rare Candies will not level up the stats as much as if you used the PokéMon to fight.
As an example, going through Victory Road the first time, I had about 15 Revives, and a few Rare Candies. In battle, I'd revive with the Revive potion (since it also gives back 1/2 the HP). Because you can't level up during the fighting stage of a battle, you need to use a Revive. After the battle, if most of my PokéMon are fainted, I could use a Rare Candy, then either a Hyper Potion or Full Restore on them to get their HP up to the max.
I realize this isn't the sanctioned way of using Rare Candies, but it's what I do.