I've been looking to use time-dependent density functional theory, but reading the literature I keep getting overwhelmed by how many different functionals there are. How should I go about selecting which functional to use?
For Structures and Energies: Answer Hazy, Try Again Later
People can talk on this subject for literally days.
It mostly comes down to computational expense vs accuracy - if you have a larger system, you can't afford the fancier functionals. The absolute highest accuracy state of the art functional-wise would probably be those using the Random-Phase Approximation (e.g.), and also the use of more complex range separation techniques (including the Coulomb-Attenuated Method mentioned below).
Having said that, a lot of people just use B3LYP for everything. B3LYP is parametrised for low-Z main-group chemistry, and so does reasonably well there. It's a hybrid functional (i.e. it includes the exact Hartree-Fock form exchange operator), so it's not the cheapest. I tend to use the series of PBE, PBE0, TPSS - their only parameters are physical constants, so they should never give surprisingly bad results.
A couple of basic guidelines, though (which should be taken as "as far as I know"s):
For TDDFT: Probably CAM-B3LYP
Fortunately, this is a bit easier.
Firstly, you want something that incorporates exact exchange (a hybrid functional), which quickly rules out many functionals. Pure GGAs and LDAs give qualitatively wrong answers for states involving charge transfer. Secondly, functionals that include long-range exchange corrections, such as CAM-B3LYP, also give better results.
Also, look out for triplet instabilities, which can be a problem with the introduction of HF exchange.
(David Tozer is my go-to author for TDDFT testing, though I would warn that despite the above answer, I've never used TDDFT in "production".)
(Now, bring on the functional flamewar.)
This is a loaded question.
Some groups focus on precisely cooking a recipe from known ingredients to produce useful functionals, the Minnesota functionals being quite popular.
In general, you will have to benchmark available functionals against your property and known analogues to your target of choice and ensure that you are capturing the relevant physics. This requires that you familiarize yourself with the respective assumptions in functional design, e.g., the homogeneous electron gas approximation.