Understanding ADS-B traffic: when can you trust it?

Portable ADS-B receivers for the iPad (like the Sentry, Garmin GDL 50 and Stratus 3) can receive ADS-B traffic in addition to weather. But unlike weather, which is broadcast continuously, traffic is only transmitted in certain cases. This can make ADS-B traffic very confusing—when does it work and when does it not work?