The double for penalties

The double was placed in the system so that in those situations where opponents had injudiciously bid too high, a double increased the penalty. In any competitive auction, once partner has bid, any double from you will be taken as penalties unless your partnership is playing an interesting convention like negative (or sputnik) doubles. Don't lose any sleep if you have never heard of these.

Penalty doubles, even at low levels, can be profitable but are dangerous.

At higher levels, the expectation that opponents will not make their contract is based upon your assumptions as to how many tricks your side will take. Don't forget that the double will alert declarer to a potentially nasty situation--normally a bad trump break at least-- and he may play the hand quite differently to the way he would have tackled it without your double. In this situation, apparent trump tricks often disappear.

The safest time for doubling  is either when opponents bid to game (4H,5C etc), or when their bid would give them game (part score of 30 and a bid of 2NT etc). At least this way, their game bonus is one that the fulfillment of their contract would give them anyway; your double will not be the reason they get game. 

The most dangerous time for doubling is when the making of their contract would give them game because of your double. (They bid to two hearts; if you double, the 120 below the line gives them the game bonus.)

However, if you only double when it is safe, life would be very dull. Just practice the apology you will make to partner when the contract succeeds.

If you are still unsure of the difference between doubles for penalties and doubles for take-out, have another look at this page.