I just made a bunch of npcs kill each other at the mill west of windhelm. While I stayed hidden in the bushes. When is a good time to use fear? I can understand calm and fury but what good is fear?

Well, you could use it to force NPCs to run from you straight into more NPCs whom you've frenzied, or into traps...

Yes, maybe into destruction runes.

Fear is a much safer alternative to Frenzy, since there's no guarantee the target won't attack you with Frenzy.

A bear is charging at you and you don't have precious time to summon a meat shield? Cast fear at it. A mob of bandits are too close for comfort? Cast rout and watch them run. You can just pick them off with destruction or let your summons chase them.