LeeSharpe: I've tried using them to make potions, and to fill them from water barrels, but the crafting window tells me I'm trying to make an invalid combination. So I don't know.
Hickory: There are several items you can make. Here's a starter that you'll need level 2 in crafting for: combine a flask with Whisperwood, and you'll get a magical armour potion. You have to experiment, as with all things crafting. If it says it's invalid, try something else.
I 'm sorry but I think you have mistaken empty flask for empty potion bottle. Flasks are new to EE.
I have thus far managed to produce with lvl2 crafting oil and poison flasks by combining empty flask with barrels. Also I have made some nail bombs, poison grenades and I 'm still experimenting.