An object that implements IDisposable has, you guessed it, a Dispose() method. In the code you write you should both declare and instantiate any object that implements IDisposable with the using statement. The using statement allows you to set the scope of an object and when your code exits that scope, the object will be disposed of. Note that when an exception occurs, this will pull your code out of scope, so it still forces a Dispose()

        using (mObject o = new mObject())
        {

            // do stuff

        } //<- out of Scope, object is disposed.

         // Note that you can also use multiple objects using
         // the using statement if of the same type:

        using (mObject o = new mObject(), o2 = new mObject(), o3 = new mObject())
        {

            // do stuff

        } //<- out of Scope, objects are disposed.

What about try{ }finally{}?
It is not needed when you use the using statement. Additionally, using is preferred, Microsoft’s own documents put it this way:

As a rule, when you use an IDisposable object, you should declare and instantiate it in a using statement.

When I started out in .NET I had a very bad habit of not using the using statement. As a result I ran into what many developers do:

     #region BAD CODE - DO NOT DO

        try
        {
            mObject o = new mObject();
            //do stuff
        }
        finally
        {
            o.Dispose(); // error - o is out of scope, no such object.
        }

        // and here is what I find on blogs all over the place as a solution
        // pox upon them for creating bad habits.

        mObject o = new mObject();
        try
        {
            //do stuff
        }
        finally
        {
            o.Dispose();
        }

    #endregion

So when should I use the using statement?
Very simple rule, if an object implements IDisposable, use it. This of course does not apply if the object is going to be used as a global object outside of a method. If that is the case, don’t forget to dispose of the object in code somewhere.