What are the guidelines of the proper use of an ellipsis.

It is usually used to indicate something left out rather than a pause. Overuse can make writing look sloppy but occasional use can be effective. I would tend to avoid it in formal writing if at all possible.

The way I was taught to use it was mainly when quoting someone else if you leave off part of what they said. Always three dots no matter how long the passage was that is being left out. That way the reader knows it is not the full quote. Basically it makes the quote more accuarte and honest in my opinion. But, I admit I use it to show a pause sometimes, or change in a direction of thought mid sentence. I agree with @janbb that in formal writing I would be much stricter when I use it, basically only for quotes as I described, while in informal writing I give myself a lot of leeway.

If an ellipsis occurs at the end of a sentence, use four dots, one for the period. http://www.fluther.com/140994/has-there-been-a-shift-in-proper-ellipses-usage-over-the/

I agree that in formal writing, you would probably want to only use it to indicate that you left out a section of a quote. If you’re writing a story, it’s mostly left to your good judgment as to how many are too many. They can help set the flow of a conversation or train of thought, as long as you don’t overuse them.
For example, it’s okay to use the ellipsis in the middle of a sentence to show a pause, or between two sentences.

“It was hell ... utter hell.” Or: “Was it a good idea? ... Probably not.”

What you do not want to do is to start acting like a sloppy fanfiction writer, slapping ellipses between paragraphs to show that the other person didn’t respond verbally.

“Are you okay?”
”...”
“Don’t glare at me!”

This kills me every time I see it.

@PeppermintBiscuit I once had a paper turned back to me annotated with the prof’s comments. Next to one passage that he found questionable, he had written only ”...”

I’ll admit I very occasionally do that on students’ papers for sheer nostalgic value. :)

Don’t forget: if the left out bits follow a complete sentence there are four dots, one directly after the last word serving as a period and three with spaces between them. If some of the left out words are part of the preceding sentence there are only 3 dots.