My players know: I love swarms. Without a doubt in my mind, they are hands down the scariest and most threatening of all monster types, up to a point. Obviously they have their limitations, but when used at the proper time, they are truly a terrifying force to be reckoned with.
From a DM standpoint, the swarms primary strength is that it cannot miss, as it occupies a character's square to attack. No matter how much armor, Dexterity, or dodge bonuses a player has, it amounts to nothing in the face of a swarm. Automatic damage each round is a great threat. At the same time, every swarm has a distraction ability that effectively nauseates a character if they fail a Fortitude save, denying them the ability to act. They sometimes are accompanied by things like fire, poison, or acid damage. The base damage of a swarm isn't very high; it increases by 1d6 every five hit dice, so players are unlikely to succumb quickly to one. But as mentioned previously, they make up for this fact by never failing to hit.
The next strength of the swarm is its malleability. A swarm can fit through any space large enough for its component creatures. This means that a swarm of fine creatures can follow players under doors, through unfinished walls, or past any barrier short of something completely solid and airtight like a wall of force. Obviously this makes simply running from a swarm a bit difficult. It states in the swarm subtype that swarms are 10ft on a side, meaning that if you're using a standard grid with a square representing five feet, a standard swarm fills four squares. These squares should be connecting at all times, but can take any shape they require. However if you feel you need a larger swarm, you don't have to bother with templates or size charts, simply add more swarms to the group, remembering to keep each square adjacent to another. To avoid having to remember stats for each swarm and keeping them separate, I'd just roll them both into a single unit, and combine their hit points. When I do this, I calculate their new combined hit dice and see whether they qualify for extra damage dice. This method is not problematic since a swarm does not dissipate until its hit points reach zero, but its still the same creature effectively.
Finally, in summarizing the strength of a swarm, they also have no discernible anatomy, meaning they cannot take critical hits, flanking, or sneak attacks. They are immune to spell effects that target a specific number of enemies, as there are literally thousands of their component creatures. Fine and Diminutive swarms take no weapon damage whatsoever, nor are they subject to combat maneuvers such as grapple or being tripped.
Swarms don't get to make attacks of opportunity, though a particularly merciless DM (i.e. me) could rule that every five foot square of a swarm that the player moves through simply does more damage as the swarm surrounds them. This doesn't exactly follow the rules as written so I'd only suggest using that method if you want swarms to have a particular bite (harharhar!). You can also apply templates to swarms, like making them skeletons or fiendish, but it can be kind of tricky, based on the peculiarity of their type. It can be difficult to know when to apply certain changes and when not to. For example, I tend to ignore the changes to damage or the addition of special attacks from a template, since their attack is nonstandard.
Swarms do have a few weaknesses, the biggest of which is a susceptibility to wind effects for Fine and Diminutive swarms. A simple gust of wind spell can cause a swarm of any size to have a really bad day. They also take extra damage from area of effect spells, so low level parties should always have a burning hands on them and then graduate to fireball. Other methods of dealing damage however are extremely ineffective, torches and lanterns can be used, but deal very low damage. Besides area of effect spells and winds however, a swarm is deadly effective, and very hard to kill. Most tactics suggest running, or attacking from range if possible. A party unprepared for a swarm can quickly find itself overrun and in a bad situation, as I have born witness to in both of the tabletop games I run.
I usually like to throw a swarm into the worst possible situation. For example at the bottom of an extremely deep pit trap, where the player is unlikely to escape. I've had them appear when a player wandered off into the desert alone after her errant camel, killing her instantly. I've had two spider swarms burst from a pair of webbed villagers in a horrifying homage to Aliens. I've had a swarm of crabs crawl onboard and attack a ship with little place to run to. I've had four swarms of bats appear in a tiny room with only one exit, while the players were trapped within and unable to get out. I would imagine throwing one at players who were already compromised in some way, like attempting to swim across a river, or while sleeping. As you can see, they are extremely versatile, and able to overrun and intimidate players of any level. In short, swarms are the best. Thanks for reading, stay tuned tomorrow for "T is for Traps".
D&D 3.5 Swarm Subtype
Pathfinder Swarm Subtype