Use hover, but don't make your UI depend on it as:
- it doesn't work on touch devices
- if used to reveal actions, those actions are effectively hidden away from the user
- hover is not accessible to all users (it requires patience; ability to exactly position the mouse)
- it's totally uncommon to activate items on hover, no matter how convenient that may seem
Hover works well on desktop machines to:
- reveal more of text truncated with an ellipsis (e.g. "User exp.." -> "User Experience")
- provide additional information on an item (e.g. information about its current state).
- show an invitation to click an element
However, if you use hover like this, make sure you always offer an alternative way to get to the same information, even it means you need two clicks to get there. Never ever depend on hover, use it only to give some users more possibilities or quicker access.
I typically argue that if you feel that hover is the best solution to offer essential UI functionality, you should take a step back and reconsider your overall solution. You almost certainly have a problem you need to solve using other means.