How do doctors decide whether to use general or local anesthesia?

Procedure dependent. The variables include the procedure, the patient, the medical history, surgeon preference, and the location. The biggest factor is the procedure iteself. Some procedures are okay under local anesthesia, with or without sedation. Other procedures cannot be done without general anesthesia. Some procedures may be done under regional (spinal/epidural or block) anesthesia. It just depends...
Customized. I agree with dr. Roethle & dr. Krook. We customize the anesthesia based on the surgery & the patient. This way we can give the patient the best result with the least exposure to risk. Remember that not all general anesthesics are the same ! every anesthesiologist customizes the general anesthesia to the patient's needs.
Depends. Some procedures can not be done under regional anastasia. Surgeons and patients preferences are also variables which need consideration. Skills of the anesthesiologist can also be a factor. In summary: you look at what way is the safest, easiest and most beneficial to the patient and adjust all other factors. Discussion with anesthesiologist always help.
Depends. When it could go either way, i describe the surgery to the patient, ask them to realistically assess their own pain tolerence, and let them choose. Most of the time certain procedures are best done under one or the other.
Depends on surgery. The type and amount of anesthetic used is determined by the procedure that the patient is to undergo.