How to return the response from an AJAX call?

down vote accepted

+100

-> If you understand the problem, have a look at possible solutions below.

Explanation of the problem

The A in AJAX stands for asynchronous. That means sending the request (or rather receiving the response) is taken out of the normal execution flow. In your example, $.ajax returns immediately and the next statement, return result;, is executed before the function you passed as success callback was even called.
Here is an analogy which hopefully makes the difference between synchronous and asynchronous flow clearer:

Synchronous

Imagine you make a phone call to a friend and ask him to look something up for you. Although it might take a while, you wait on the phone and stare into space, until your friend gives you the answer you needed.
The same is happening when you make a function call containing "normal" code:

function findItem() {
    var item;
    while(item_not_found) {
        // search
    }
    return item;
}

var item = findItem();
// do something with item
doSomethingElse();

Even though findItem might take a long time to execute, any code coming after var item = findItem(); has to wait until the function returns the result.

Asynchronous

You call your friend again for the same reason. But this time you tell him that you are in a hurry and he should call you back on your mobile phone. You hang up, leave the house and do whatever you planned to do. Once your friend calls you back, you are dealing with the information he gave to you.
That's exactly what's happening when you do an AJAX request.

findItem(function(item) {
    // do something with item
});
doSomethingElse();

Instead of waiting for the response, the execution continues immediately and the statement after the AJAX call is executed. To get the response eventually, you provide a function to be called once the response was received, a callback (notice something? call back ?). Any statement coming after that call is executed before the callback is called.

---

Solutions

There are basically two ways how to solve this:

1. Make the AJAX call synchronous (lets call it SJAX).
2. Restructure your code to work properly with callbacks.

1. Synchronous AJAX calls -- DON'T DO IT

It is generally a bad idea to make AJAX calls synchronous. DON'T DO IT. I'm serious. I only mention it here for the sake of completeness. Why is it bad do you ask?
JavaScript runs in the UI thread of the browser and any long running process will lock the UI, making it unresponsive. Additionally, there is an upper limit on the execution time for JavaScript and the browser will ask the user whether to continue the execution or not. All of this is really bad user experience. The user won't be able to tell whether everything is working fine or not. Furthermore the effect will be worse for users with a slow connection.

jQuery

If you use jQuery, you can set the async option to false. Note that this option is deprecated since jQuery 1.8. You can then either still use a success callback or access the responseText property of the jqXHR object:

function foo() {
    var jqXHR = $.ajax({
        //...
        async: false
    });
    return jqXHR.responseText;
}

If you use any other jQuery AJAX method, such as $.get, $.getJSON, etc., you have to change it to $.ajax (since you can only pass configuration parameters to $.ajax).
Heads up! It is not possible to make a synchronous JSONP request. JSONP by its very nature is always asynchronous (one more reason to not even consider this option).

Without jQuery

If you directly use a XMLHTTPRequest object, pass false as third argument to .open.

2. Restructure code

Let functions accept callbacks

The better approach is to organize your code properly around callbacks. In the example in the question, you can make foo accept a callback and use it as success callback. So this

var result = foo();
// code that depends on 'result'

becomes

foo(function(result) {
    // code that depends on 'result'
});

Here we pass a function as argument to foo. You can pass any function reference, for example:

function myCallback(result) {
    // code that depends on 'result'
}

foo(myCallback);

foo itself is defined as follows:

function foo(callback) {
    $.ajax({
        // ...
        success: callback
    });
}

callback will refer to the function we pass to foo when we call it and we simply pass it on to success. I.e. once the AJAX request is successful, $.ajax will call callback and pass the response to the callback (which can be referred to with result, since this is how we defined the callback).
You can also process the response before passing it to the callback:

function foo(callback) {
    $.ajax({
        // ...
        success: function(response) {
            // e.g. filter the response
            callback(filtered_response);
        }
    });
}

It's easier to write code using callbacks than it seems. After all, JavaScript in the browser is heavily event driven (DOM events). Receiving the AJAX response is nothing else but an event.
Difficulties could arise when you have to work with third party code, but most problems can be solved by just thinking through the application flow.

Use deferred objects / promises

While directly passing callbacks works just fine, it can become inflexible in certain situations. Deferred objects / promises are a great way to deal with many callbacks and decouple your code.
Deferred objects are not unique to jQuery (see also the Promise/A proposal) and there many independent implementations but I will only focus on jQuery in this answer.
Luckily for us, every AJAX method of jQuery already returns a promise which you can just return from your function and the calling code decides how to attach the callbacks:

function foo() {
    return $.ajax(...);
}

foo().done(function(result) {
    // code depending on result
}).fail(function() {
    // an error occurred
});

Describing all the advantages that deferred objects offer is beyond the scope of this answer, but if you write new code, you should seriously consider them. They provide a great abstraction and separation of your code.

Improving Bad Code

Deferreds can make it easy to transform broken asynchronous code into working code. For example suppose you had the following:

function checkPassword() {
    return $.ajax({
        url: '/password',
        data: {
            username: $('#username').val()
            password: $('#password').val()
        },
        type: 'POST',
        dataType: 'json'
    });
}

if (checkPassword()) {
    // Tell the user they're logged in
}

This code misunderstands the above asynchrony issues. Specifically, $.ajax() doesn't freeze the code while it checks the '/password' page on your server - it sends a request to the server and while it waits, immediately returns a jQuery Ajax Deferred object, which means your if statement is going to always get this Deferred object, treat that as true, and proceed as though the user is logged in. Not good.
But the fix is easy:

checkPassword()
.done(function(r) {
    if (r) {
        // Tell the user they're logged in
    } else {
        // Tell the user their password was bad
    }
})
.fail(function(x) {
    // Tell the user something bad happened
});

So now we're still calling the '/password' page on the server, but our code now properly handles the wait time for the server to respond. The $.ajax() call still returns immediately with a jQuery Ajax Deferred object, but we use it to attach event listeners to .done() and .fail(). In the .done() call, where the server responded with a normal response (HTTP 200), we check the object returned by the server. In this example the server is just returning true if the login was successful, false if not, so if (r) is checking for true/false.
In the .fail() handler we're dealing with something going wrong - for example if the user lost their internet connection while they were typing in their username and password, or if your server went down.