There isn't much evidence from the early Republican era, [edit: I'm wrong, Livy records one in 471BC] but certainly by the middle Republic it was rare. When Crassus revived it during Spartacus' revolt in 71 BC, it was considered an ancient practice and was no longer used; Caesar threatened to decimate the 10th legion (I think) and I believe Augustus did decimate one of his legions after they lost a battle - unfortunately Empire warfare isn't my strong point so I can't tell you which one.

I think the point was that they didn't know decimation was going to occur; from the account of Crassus' one, the army was drawn up, it was announced, and then it was carried out immediately - the soldiers drew lots while they were standing and then had to execute their colleague immediately.

I think it was rarely used because it was seen as such a desperate and dreadful measure; the soldiers would have to kill their own comrades. It's my view that the soldiers would have to feel it was in some way justified; there are enough legion revolts throughout the Roman's history to make it clear what would happen if a Commander ordered it and the soldiers felt they didn't deserve it. Being beaten by a mob of slaves would be one such situation, I suppose?