I think the key to knowing when to use a blender is to think "liquid" - and plenty of it. Great for blending liquids, making purees, emulsions like mayo or pesto, and not too shabby for malts and milk shakes.
Of course, a food processor will do these things, too, plus so much more. Well, don't know about making malts ... never tried that. And, I think the blender does a much better job at making small batches of pesto and mayo than my food processor ... but I don't have a mini bowl for mine.
The truth is that when my blender went to appliance heaven a few years ago I bought an immersion (stick/boat motor) blender and it does everything I need - except making malts (never tried it for that) which my waist line doesn't need.
I have a very small kitchen with limited storage space and virtually no counter space - so the immersion blender is just right for me. If I had more space I probably would have a counter-top blender in addition to my food processor.