Taken from the Algorithm FAQ (http://www.gamefaqs.com/psp/615911-final-fantasy-iv-the-complete-collection/faqs/54945):
"The most important tip that you will ever read is healing outside of battle. Potions are always the most effective outside of battle. Cure is also the most effective spell outside of battle. The formula for any Cure spell outside of battle is...
Cure3/Curaga and Cure4/Curaja is not as powerful, even though Cure4 heals a character to the max, regular Cure can heal up to 911HP for 3MP, which only requires 12 castings to heal 9999HP. This is 4 less MP than Cure4. So if you wanting to conserve Rosa's MP and trying to use it wisely, you will benefit most from casting Cure outside of battle and equipping anything that increases her Will Power. Just imagine what 3MP can do for you. Note that this only applies outside of battle, as you want to use the strongest Cure spell in battle.
As an extension of this thought, Cure3/Curaga is the best spell to use in battle (unless you're desperate for Cure4/Curaja). Cure3 heals 9x more than Cure for only 6x the MP. That's a bargain for HP healed. Cure4 (when split) heals only 2x more than Cure3, but costs a little more than 2x the MP of Cure3."
TL;DR Version: Use Cure when you are NOT in battles, and Curaga when you ARE in battles. In both cases, the higher your Will stat, the more effective the spell will be.
The above post was typed in front of a live studio audience.