JRand: Bitters are herbal concoctions used to add flavors to cocktails. As ChasSmith pointed out, the traditional martini recipe calls for a couple of dashes of orange bitters in with the gin and vermouth. And Manhattans as well as Old Fashioneds use them.
Angosturra and Peychaud's are the two traditional varieties. But I also have chocolate, mint, celery, rhubarb, cherry, blood orange, peach and grapefruit bitters to play around with. You use them sparingly because they are strong, condensed flavors and can easily override whatever you use them in.