I've been burned way too many times by poor use of functions to be any kind of advocate for them. However, if you really want to drill down on them, then I recommend Andy Novick's book. He covers appropriate use of functions very well.
"The credit belongs to the man who is actually in the arena, whose face is marred by dust and sweat and blood"
- Theodore Roosevelt
Author of:
SQL Server Execution Plans
SQL Server Query Performance Tuning