The best way to handle this situation is to know your rights. The DOT rules state airlines cannot bump you involuntarily unless they asked for AND are unable to find volunteers willing to give up their seats in return for compensation. If you are one of the chosen to be bumped, the airline must give you a written notice of your rights and give you immediate compensation.
If the airline manages to find an alternate flight for you that arrives at your destination between one and two hours after your original arrival time, the airlines must pay you an amount equal to your one-way fare to a maxium of $200. If the airlines get you to your destination more than four hours late, the compensation is twice your one-way fare, up to $400. This amount was set in 1978 and has never been changed.
The compensation above is in addition to your ticket. You always get to keep your ticket and use it on another flight. You can also choose an "involuntary refund" for the ticket. This refund is essentially your compensation as payment for your inconvenience. You may also be offered free transportation for future flights but you always have the right to insist on a check. But the DOT advises that once that check is cashed or the free flights accepted, you will probably lose the right to demand more compensation later. There are exceptions to these DOT requirements. If the airline substitutes a scheduled aircraft with a smaller plane, the airline is not required to pay passengers who are bumped as a result. Also these rules do not apply to flights departing from a foreign airport to the U.S. and between foreign destinations.
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