Many cake and cookie recipes begin by creaming softened butter. To cream, butter must be brought to a cool room temperature (about 67 degrees is ideal), so that it's malleable, but not really soft. This is often called "the plastic stage" and it is the consistency when it will best hold air and be stable in your mixture, making for a light, airy, cake. Here are three clues:
Still in the wrapper, you should be able to bend it in the middle with little resistence and without cracking or breaking.
When you unwrap the butter, it's wrapping should leave a bit of a creamy residue on the inside of the wrapper.
The butter should give slightly when pressed but still hold it's shape.
It can sometimes take a long time for a stick to soften. If you're in a hurry, you can speed up the process by cutting the butter into tablespoon-sixed pieces. This will soften to the right stage in about 15 minutes.
If your butter is too cool when creamed, it will look shiny and granular after adding sugar and will not aerate properly. If creamed at the proper temperature, the butter and sugar mixture will look thick, dull and smooth.
If you're using a hand held mixer and want to keep the bowl from spinning, twist a damp towel to form a coil, then twist that into a circle and make a kind of nest for the bowl to sit in. This will keep it secure while you mix.
Make sure your eggs are at room temperature. You can sped this up by placing them in a bowl of warm water for 10-15 minutes.