Question: What level of complexity should a Use Case diagram illustrate - how much detail should be included, and what is the "cut-off" point for when a Sequence Diagram, or alternative UML diagram should be used?

Answer: 
Although the UML spec lets quite a lot of freedom as to what may appear in any UML diagram, the following should go into a UC diagram:

* Actors
* Use Cases
* possible a boundary that symbolizes the system under consideration (SUC).

This for the "main" UC diagrams, but you will likely create others that include requirements and/or classes of the design, etc.

Now, the actors are all objects that interact with the SUC in first place. Use cases are all those bubbles that signify some individual added value (not some technical procedure!!) the SUC offers to its actors.

Use case diagrams are about added value of the system, not about technical features!
**Use cases**

UML defines use cases: 

> 
> Use Cases are a means to capture the requirements of systems, i.e.,
>  what systems are supposed to do. (...) A Use Case is a specification
>  of behavior. An instance of a Use Case refers to an occurrence of the
>  emergent behavior (...). Such
>  instances are often described by Interactions.
> 
> 
> 

In other words, it's an external view of what the system shall do in interactions with the external world. 

The level of detail SHOULD be rather high. Typically, the top level of an interaction of a user with the system, that is the main function that a user would invoke for achieving his **goal**. Using the usual ATM example, the main goals would be "withdraw cash", "consult account balance", and certainly not "insert card", type in pin", "choose action in menu", "take money". 

But there is no norm: you MAY as well have very detailed diagrams. It's just that they would be painful to draw, and not necessarily add to the understanding of the requirements. This is why, a recognized practice is to detail the high level use cases ("*sea level*") further as narratives, for example using [Cockburn's](http://alistair.cockburn.us/Use+case+fundamentals) approach. 

**Cut off with sequence diagrams**

UML defines the sequence diagrams: 

> 
> A sequence diagram describes an Interaction by focusing on the
>  sequence of Messages that are exchanged (..) Interactions that are
>  described by Sequence Diagrams form a basis for understanding the
>  semantics of the meta classes in the Interactions package.
> 
> 
> 

Here the focus is more on the internals of the system, and messages exchanged. However, UML sees a use case as a specialized class diagram. With this in mind, if you would have very detailed use case diagrams, the sequence diagram should describe an interaction between and actor and a use case.