The first person point of view is told from one of the character's points of view, typically the protagonist. The story will use pronouns like "I" and "we" throughout to indicate the narrator's involvement in the book's events. This narrative point of view is often used in fiction to help draw the reader into the text. Since the reader is aware of the narrator's unvoiced feelings and thought processes, it can make him feel like he's taking part in the story himself. First person point of view is also used in many autobiographies, as the author is retelling the stories of her own life.
The second person point of view is the most rarely used because it's very difficult to maintain throughout a longer story. This point of view uses "you" to address another person. While this method can be useful in instructional essays, it can easily confuse readers in fiction and nonfiction pieces. Occasionally, fiction writers have used the second person point of view to allow a story's narrator to directly address his younger self.
Third person point of view involves a narrator relaying the characters' stories through the use of pronouns such as "he," "she" or "they." This point of view is used in both fiction and nonfiction writing, and is also the standard for formal essays and academic works. It is the most flexible and widely used point of view and adds a sense of objectivity to the work as the events or facts unfold on their own.
While most authors choose one point of view and stick with it throughout the entire work, a small number choose to tell their stories through alternating points of view. This approach is often used in fiction -- a first person and third person pairing is especially common. For example, a narrator may tell the bulk of a story, then the point of view may switch to the first person to help the reader better understand the feelings of the protagonist.