Bay used to crisp fermenting pickles
My dad uses fresh bay leaves because he has a bay plant in his yard but, in general, when a recipe calls for bay leaves, it means dried bay leaves. They're cheaper and much easier to find and - in general, considering how they're used - they provide the same results in the end.
To quote Cook's Illustrated:

Fresh vs. Dried Bay Leaves
Fresh bay leaves have become available in many supermarkets. In the test kitchen, we use fresh herbs more often than dried—bay leaves being an exception. To decide whether we should switch, we made two batches of a béchamel sauce, simmering dried bay leaves in one and fresh in the other.
Surprisingly, they finished in a dead heat. Here's why: The aromatic molecules in most herbs are more volatile than water. Herbs that grow in hot, arid environments—like bay leaves—are different: Their aromatic molecules are less volatile, retaining flavor even after water evaporates. Similarly, in long-cooked applications, we've found that rosemary, thyme, oregano, sage, and other herbs native to hot, arid environments do as well as their fresh counterparts. (And bay leaves are used only in long-cooked recipes.) Since they are cheaper and keep for months in the freezer, we'll continue to use dried bay leaves (about 10 cents per leaf), instead of springing for fresh, which cost twice as much.

So, while in many cases, fresh herbs are preferred, this doesn't hold true for bay leaves, so go with dried unless you see a recipe that specifically calls for fresh.
As to how many, I'd go with your recipe on that. What you're making and how strongly you want the bay flavor to be present will determine how many you need to use.