First, know the mechanics of how the terraformer works. Once you know that, you'll understand why it's pointless to build a BR-4 terraformer for a planet that only needs 15 ag points to reach its full potential and you won't waste resources building one (yes, I really have seen this happen.)
Terraforming is important because it increases your agricultural outout, allowing your planets to grow faster and to their fullest potential. As your population grows so does your capacity to build and maintain ships. The key to terraforming, though, is knowing when to do it. Terraforming at BR-1 is pointless, and even at BR-2 it is questionable. You should have enough ag from your early colonization and trade to get you through to BR-3 when the bonus added from the terraformer is more proportional to the cost of building the ship.
The key to terraforming is to keep an eye on your ag level and your maximum population setting. Don't terraform unless you need it, either for faster growth or to be able to grow up to your maximum potential. In the olden days, when only the veterans knew how to use the pop trick and overbuilding was unheard of, terraforming was almost always the first tech development chosen. Players would methodically mix in building a terraformer each turn with their other ships, always making sure to keep their maintenance level above 1.0. When it might take a dozen turns to assemble a twenty-ship attack fleet, terraforming was seen as useful and even essential. If you play this type of conservative war of attrition, then you should certainly use terraformers for maximum population growth so that you sufficient econ to support your ever-increasing fleets over long periods of time.
In today's game though, where 15-20 ship overbuilds in a single turn are not unheard of, we must reexamine when, and even if, to use the terraformer. In an aggressive, fast-paced game, a methodical nuking and colonizing of enemy planets can often carry you through the whole game without the need for terraforming. This is even more true if you're in a large game with several allies and/or trading partners. Even here, though, you must remain flexible. The map could easily force you to choose terraformers right away — I've lost count of the times I have been surrounded by high-mineral/fuel planets that had almost no ag, and where all the ag-rich planets were too far away to quickly reach and colonize.
Note that in some of the new game versions you can terraform your ally's planets. It therefore might be in your best interests to work out an agreement whereby one of you provides terraforming services for both. That way only one of you has to choose that tech selection. Just remember, though, that in order to keep tech development roughly equal this extra terraforming must be balanced by keeping a smaller fleet in the field.