During the repetition of the amida, many shuls (Minhag Ashkenaz) have the Minhag that after kedusha, the chazzan says ledor vador instead of the usual ata kadosh. When was it, why was it instituted, and what is the source for this change?
As noted by @magicker72 in a comment, there are a number of examples of communities that always recited לדור ודור, even in the silent amidah. For example, see the siddur of R. Amram Gaon here (page15). I believe that this was also the ancient custom in Provence.
However, as noted in the question, there is a common custom for the individual to say אתה קדוש, and only the shaliach tzibbur uses לדור ודור. This can already be seen in the nusach hatefillah of R. Sa'adiah Gaon (here (page 77) and here (page 98)), as well as that of Rambam (here and here).
As to why an individual says אתה קדוש instead of לדור ודור, Kol Bo writes in Chapter 11:
ויש אומרים שאין אומר היחיד לדור ודור נגיד גדלך אלא לדור ודור אתה קדוש והטעם לפי שאין היחיד אומ׳ קדושה תקנו נוסח זה שיש לה קדושה בתפלתו כמו שליח צבור כ״מ.
Some say that the individual does not say לדור ודור נגיד גדלך but instead לדור ודור אתה קדוש. The reason is that since an individual does not say kedushah, they enacted to recite this formula, so that he has kedushah in his prayer, just like the shaliach tzibbur. So I have found.
That is, since the paragraph לדור דור does not explicitly sanctify G-d in the way that kedushah does, it was enacted that an individual, who does not say kedushah, should instead say a paragraph beginning with אתה קדוש (You are holy) so that he too can explicitly sanctify Him.