I had no idea it gave a plus to defence! I use it quite often. It works very well when you have a single Roman unit defending against multiple enemy troops - such as defending a bridge or fighting in a narrow city street. If the unit were out of guard mode the formation would break up as they begin to bend around their opponent - which I think is the best strategy if you only have one opponent as you will wrap around their flanks and all units are vulnerable to being hit in the sides and rear. But because they're out of formation and in the process of fighting that unit, they're not braced to withstand attacks from other units wading in and so will take heavy losses. So use guard mode if you have a horde bearing down on you. It looks very Roman to have a thin line of infantry holding their own against a mass of enemies, front ranks hacking and stabbing, rear ranks waiting patiently. Another plus is that you can still throw pila while in guard mode.
I also use it on phalanx troops. They come with guard mode switched on, which is good because the last thing you want is for a phalanx to start bending around its opponent! That way lies a dead phalanx. However it's been well noted that phalanx troops are rubbish in melee, and this is entirely because they have guard mode switched on. It's not very easy to melee fight effectively whilst you're trying to keep in perfect formation with the guy to your right. Take them out of guard mode and melee fight them and suddenly they're a lot more effective. This way a phalanx can fight better on walls, they can flank other units and charge them in the rear. Also it's good to switch guard mode off if enemy troops, especially horsemen, have got in amongst your men. You'll notice they'll start dying very quickly when you turn guard mode off.
Edit - Oh and I also use it on archers sometimes. If you're storming a city and order archers to shoot at specific units over the top of the wall, if that unit goes out of range and guard mode is switched off, the archers will start to follow it. You may not notice that they're doing this as you're busy managing units elsewhere, and suddenly you find that they've wandered into the path of a tower and they're getting badly shot up. How annoying. Switch guard mode on, however, and when the unit is out of range they'll just stop shooting and stand still. Simples.
[This message has been edited by ShieldWall (edited 03-09-2012 @ 04:53 AM).]