Okay, here's the short version. Of course, the truth is in the AIP. And the most official place for the Dutch AIC would be
http://www.ais-netherlands.nl.
If you want to fly IFR, you have to have mode S or get an exception through Eurocontrol.
If you want to fly VFR in any of the Transponder Mandatory Zones, you have to have mode S. TMZs are currently virtually everywhere FL65+ and a few places 1200'+. The FL65 limit is going to drop to 1200' over the next two years.
If you want to fly VFR outside the TMZs but higher than 1200', you have to have a transponder with at least mode A/C. (Well, actually you might need just mode A, I'm not sure.)
If you want to fly VFR below 1200' you currently do not require a transponder.
The following AIC explains it all:
http://www.ais-netherlands.nl/aim/08...dex-en-GB.html
To avoid ACAS reports you are NOT supposed to activate your transponder when flying underneath the Schiphol TMA, regardless of whether you have mode S or not. Although today, talking to Amsterdam info, I was specifically asked to turn it on anyway there.
I did my first cross-country flight in quite a while today and there were loads of aircraft being queried by Amsterdam Info about their mode S readout and so forth. All very friendly but you could tell that the controllers indeed do have mode S readouts on their radar screen and they do know what's in your flightplan. /C or /S. They are, when time permits, notifying aircraft of any discrepancies, faulty settings and so forth. Also, very unusual, I crossed the Schiphol CTR and did not get a separate mode A squawk. Apparently the mode S ID readout was good enough to let me through.
Another tip, especially for rental aircraft, is to check the Flight ID that's set in the transponder before startup. It should read your callsign as per the flightplan, without any extra spaces or anything. Apparently people are pulling pranks on each other with this. One example I heard was that "JESUS" was set in the Flight ID instead of the true callsign.