Many people are confused on the meaning and value of praying for those who have died. We can pray for anyone who has died.
We should especially pray for members of our families who have passed on and having masses said are the best prayers of all.
Plenary indulgences may be gained for the souls in purgatory. So can partial indulgences. Make sure that you are reading the new indulgences from the changes under Blessed John Paul II, as indulgences have been made a bit harder to obtain than before.
If you are a reader in America, plenary indulgences are explained here in this book, which is published by the USCCB and costs quite a bit, which is unfortunate.
http://www.usccbpublishing.org/productdetails.cfm?PC=705
Sadly, there is a lot of outdated and false information on the web.
If you are not in the States, phone your chancery office for details, or look at the websites of your particular countries bishops' conferences. Father Z has a helpful blog this past week on indulgences found here.
Do not assume that indulgences are the same for all bishops' conferences or the same as before the pontificate of Blessed John Paul II.
Do not ever, ever fall into false practices concerning the dead. Even in England, a friend of mine met someone in Walsingham who claimed she could get in touch with my friend's dead grandmother. This is a serious mortal sin of necromancy and that person is more or less a false seer. This happened at a charismatic conference.
The other thing one must not do is worship the dead. Again, especially among our Hispanic brothers and sisters, there is confusion on this point.
St. Ambrose forbade St. Monica from putting food offerings on the graves of the dead. This had been her custom and she was corrected.
More correction needs to be done on this custom, which confuses many.