is used for events that took place in the past and have been finished in the past. (Ich las das Buch. - Aber ich habe vergessen was darin stand.) And it is the preferred form of past tense for written narrations, novels und stories (Emil nahm das Messer und stach den Fremden nieder). As part of spoken language it is only used in northern parts of Germany, while in southern parts of Germany and in Austria this form is rarely used.
I grew up in Austria (and still live there) and had to learn the Präteritum (which is called "Mitvergangenheit" in Austria) from the teachers in school, because i never did hear it in spoken german before, and even today to me it still sounds a little bit "artificial" compared to...
This tense should be used to describe events that did start in the past but still have influence to the presence. (Ich habe das Buch gelesen. - Und nun bin ich klüger.) But in spoken German, mainly in southern parts of Germany and in Austria, this is the only one form to describe events from the past.