The decision is never easy, but as other stated, you will know when it is time, we had to put down the family dog a few years ago and it was one of the hardest things we did. I knew it was the right thing to do when he could no longer greet us at the door, he had been to the vet and the vet said it was our decision, looking at the old guy, he just put his head down and almost relaxed knowing that his pain would finally end. After about 3-4 days we were actually releived that he was out of his pain, and we could talk about him as though he was still the lively dog we had enjoyed for all those years, not the pain filled soul who had been suffering those last few months.
My sympathies to you and your family, embrace the wonderful memories, but be brave enough to allow your pet to be released from the pain.