Team matches are the biggest area where PSYCH-OPS are employed. It can also occur during a friendly game, when an opponent is consistently overrun, and they feel stuck.
Hardcore PSYCH-OPS is something that is best not to use, it wears on you just as much as it wears on them. In a game of football, it's called trash talking, in a FPS, it's PSYCH-OPS.
A personal note: When someone scores a good shot on me, I usually don't compliment them directly by saying NS (nice shot)or G1 (good one), my compliment is indirect, IOU (I Owe You). It means the same thing, but it also tells them not to celebrate, because you are now being hunted. A "G1" can make a player feel more confident, whereas an IOU will put a tinge of worry into them. I'd rather face a player who is a slight bit worried rather than a bit more confident.