Materials:

Tongs (Not shown)
Funnel
Hammer (Not shown)
Glue (Not shown)
Beer Bottle
Large Candle

Step 1: Melt Your Candle

Get a small pot and stick your candle in it. Turn the heat on low. Wait. Check on it every few minutes. Be careful, you can burn the wax! If it starts smoking, take it off the heat. Once the wax is completely melted and clear, take some tongs and fish the wick out. Set aside.

Pouring the wax:

Note: You will make a mess.

If you want, before you pour the wax, you can squirt some cooking spray into the bottle to make removing the candle from the bottle easier later on, but I didn't try it so I can't predict how it will go.

Stick your funnel inside the the beer bottle and *carefully* pour the wax into the bottle. Quickly move on to step 2.

Step 2: Wicking and Removing the Label

While the wax is hot, carefully peel the labels off. The heat will melt the adhesive a bit and make this process easier. Always keep a towel between the hand you're holding the bottle with and the bottle itself.

Cut a sideways slit in the middle of a piece of tape and stick the wick into the slit. Squish the tape around the wick to hold it in place. Insert the wick into the bottle and press the tape onto the bottle.

Step 3: Breaking the Bottle

Once the wax is completely hardened, (wait at least 4 hours to be safe. Overnight is better) ready your hammer.

Turn your hammer around and CAREFULLY (Did I mention carefully?) use the back end of your hammer to break the bottom off of the bottle. You don't want to break the candle inside the bottle. Chances are the cracks will travel all the way up the bottle (this is good). Once there is sufficient crackage, use the back end of your hammer to pull jagged ends away from the bottle. I would recommend some kind of Kevlar (sp?) gloves to protect your hands. Do NOT try to use your nails to get a better grip on the glass. You will have a bloody candle. (Trust me, I know.)

Once you have enough of the candle exposed, grip the candle and ever-so-gently twist it. You'll hear some nice cracking sounds as the candle separates from the glass. Carefully remove the candle.

Step 4: Labelling

Apply glue to your label. Use your finger (or a paintbrush, if you're fancy) to spread the glue around the label evenly. Stick the label on and let dry. You can make more whimsical candles by collecting a bunch of labels and doing a decoupage-type thing, or you can layer different colored waxes inside the bottle for a more eye-popping effect. I just drew some lines with a sharpie after everything was dry. Have fun!

P.S. If the top of your bottle comes out a bit jagged, heat a saucepan up to medium on your stove, turn your creation upside down and carefully touch the tip of your bottlecandle to the pot. It will melt it down a bit. Then turn off the stove, remove your candle and re-position the wick.