Hello, you're both right, let's clarify a little :
-"On" can be used as "nous", and when we speak to friends or people we know, we use it more than "nous" (but "nous" is used when you speak with personn you want to show respect to or where we write letter)
Exemple: Nous somme content de te voir = On est content de te voir = we're pleased to meet you
-An other use of "on" is to describe a person or a group of personn wich is undeterminated. In this case, it can not be replaced by nous.
Exemple : Some one is knocking at the door = On frappe à la porte.
Sorry for my English and i hope i helped you ! Tell me if it's not clear !