Ideally you want to water your plants before they start wilting; which doesn't usually happen until the soil is already bone dry and pulling away from the sides of the container. Much beyond that point and vascular damage is likely to result, if it hasn't already.
More commonly new growers are ridiculously fretful about watering, possibly due to the constant alarmist warnings against over/under watering. Some new growers apparently heed these warnings a bit too seriously and become so worried about over-watering that they don't water properly; they are afraid to water sufficiently and frequently enough.
I would say that over-watering is more likely to result in those who obsess over their plants and fuss with them more than they should or are just a bit impatient; i.e. checking on them every hour, thinking if they water/feed them more they will grow faster, always wondering what else they can do to them, etc. In reality over watering isn't something that happens that suddenly. It also has a lot to do with your medium/soil structure. Compacted soils with too many minute particles become water logged, water will drain through very slowly if at all. This also means hindered air exchange, so any oxygen that was dissolved in solution will quickly be depleted. Plant roots need oxygen as do aerobic bacteria, without it things go anaerobic, which also allows bad microbes to proliferate.
Therefore, if you have a medium with proper structure and which can hold both air and water, it is much more difficult to over water.
When the top inch (for smaller containers) or two (for larger containers) is dry, as others have mentioned, you water and you use enough so that you get run-off. If you let the soil get extremely dry before watering it is probably going to piss through your container quickly. Best to water before that, otherwise you would then have to wait until some is absorbed and water some more, or you let it all drain into your tray and more will eventually be absorbed. As a general rule, though, you don't let your containers sit in stagnant water/run-off, because this water will soon be depleted of oxygen.