First things first. We are going to need to following. .
Hot and Cold Water
Gloves & Eye ware
Taking the glass cutter we need to make a perfectly, or as close as possible, line around the point you wish the bottle to break. A firm grip and a Jig will help keep the line fairly straight. This is the most important part. The straighter and more consistent of line the better chances you have to create a cup.
Heat water to a boil in a tea pot or kettle.
Fracturing The Glass
Be careful and take safety precautions. (gloves and eye ware recommended)
Take the bottle, by the bottom, and slowly and carefully pour a small amount of hot water directly on the edge of the bottle where the score line is.
Rotate the bottle consistently and continue pouring hot water for a full revolution.
Just as you poured the hot water, do the same with cold tap water. 1 full revolution.
Now its time to check for any cracks. . . usually there will be a small one at this time right along the score.
To check for a crack it is a good idea to change the orientation of the bottle so that you can catch the light reflecting off of the inner separation of the glass. The crack might not be obvious at first.
Don't worry if you can't see any cracks, they will come.
Repeat alternating hot and cold water until the bottle has cracked all the way around.
You may notice that the glass did not completely break along the score line. Using the glass cutter you can sometimes "chip" or "pressure" away unwanted pieces. This process take some getting used to but most of the time the score will be respected when you are trying either of the methods above.
To Pressure: use the teeth of the glass cutter and place it over the edge of the glass. Take the glass cutter and push the glass edge into the center of the cup. This should cause the excess glass to break off.
To Chip: The backside of the glass cutter will may metal ball end, this is perfect to "tap" on the glass causing it to crack along the score. Tap the piece of glass you no longer wish to keep.
This is the easiest step. If you have made it this far, Congratulations! With a piece of sandpaper on the counter take the glass upside down and rotate in a circular motion to even out the edge. This will slowly sand down any peaks and even out some of the valleys in the glass.
Once you have a smooth even edge, take a piece of sand paper (square 4in x 4in) and fold it in half. Use this, along with your finger, to round out the inner and outer edges of the cup.
A couple of passes at sanding should leave you with a smooth rounded edge. Carefully test the edge with your finger to make sure all sharp pieces are removed.
No longer do you have to decide between out of the bottle or in a glass. . . you now have both. Enjoy using your glass.
They should be dishwasher safe (that's how I clean mine).
Be careful because this type of glass is fairly prone to chipping when coming into contact with other hard objects.