I don't understand when to use the poisson formula instead of the binomial formula (assuming that there's only two formulae to choose from).

Poisson: $\displaystyle P(X) = \frac{e^{-\lambda}\lambda^x}{X!} $

Binomial: $\displaystyle \binom{n}{X}p^x(1-p)^{n-X}$

The notes say that you use poisson when "you wish to count the number of times an event occurs in a given area of opportunity". But I don't have a clue what that means! So the question is when do I use poisson and when do I use binomial?

Thanks

Edit:

Sorry for spelling the title wrong! I can't change it now apparently. Who knows what "possion" is....