When would you choose a master-detail relationship instead of a lookup relationship?

I use master-detail when the child cannot exist without the parent: the child inherits sharing and ownership from the master, is deleted when the master is deleted, and the master can have roll-up summary fields over it.

I choose a lookup when the records should be independent, need their own owner and sharing, or when the relationship is optional.

The key points are ownership and sharing inheritance, cascade delete, required parent and roll-up summaries. A strong answer includes a practical example. A pitfall is not mentioning that detail records lose their own owner field.