Osu, or 押忍, is one of those weird things that Americans like to use but don't really understand. It's meaning in America is quite different from it's meaning in Japan (where I've heard it best translated as "dude" - provided you are a California surfer or a Ninja Turtle). As in, you see a close friend and you say "Dude!", meaning "what up home skillet". Just like with "Dude!", you don't really use it to say hi to your boss, or a woman, or to say yes, or any number of things that people use it for here.
It's usage here is obviously different. Here it's used as a catch-all word that for some is used to say hello, to answer in the affirmative, to establish an esprit de corps, to say goodbye, or to say I have to go pee. That doesn't make it wrong - we're not Japanese so we can pretty much do what we want - they don't sell real tacos at Taco Bell after all.
To get the actual usage then, you have to watch the culture of the place that you are at. Some groups use it sparingly, others use it like powdered sugar at a doughnut factory. How you use it yourself is really based on that culture and your own feelings on the matter.
http://www.24fightingchickens.com/2005/08/29/appropriate-usage-of-osu/
How you say it depends on where you are. In America, people tend to pronounce karate wrong, and no one who isn't Japanese really cares. Anyhoo, here is how you pronounce it in Japan.
http://www.24fightingchickens.com/2008/12/28/how-to-pronounce-osu/