There have been quite few instructables on bottle cutting on instructables lately, some of them quite good. They are more about the bottle cutter than the finishing touches on the bottles so I thought I'd cover that here.
Step 1: The Bottle Cutter.
I used to have a really nice bottle cutter from my grandpa but it has disappeared. So I made new temporary one from stuff I had lying around. Shelf from Ikea named Knoppang, glass cutter, clamp, small wood pieces and a screw. The pictures show the layout.
Step 2: Cutting It.
Start by adjusting the cutter. I put business card between the bottle and the shelf and moved the cutter until it just touched the bottle and tightened it. Then I removed the card and rotated the bottle one full turn while pressing it against the cutter. Do not rotate it more than 1 full turn. Pictures 2 and 3 show the cut, this one was pretty good but slightly too deep.
Step 3: Breaking It.
Break the bottle using the standard method of alternately running cold and hot water over the cut. In picture 2 you can see the reflection on the cut on the right side, this is where it is already broken, in picture 3 the half break is on the left. After that you need to be very careful and not pull on the top like I did while keeping under the water causing the uneven break with a peak standing up from the bottom part. If you get peak like this do not try to break it off. This is a good example of a break that was not perfect but can easily be fixed in the next step.
Step 4: Polishing the Top.
Picture 1 shows plastic card diamond files, They are inexpensive and widely available, I bought a set of 3 for about 10 dollars few years ago from Amazon. The blue one is fine (600 grit) and the yellow is medium (300 grit). I lubricate them with windows cleaner. Using water is fine, the main thing is to keep them wet. I just prefer how they feel with the windows cleaner and the ease of applying it.
Put the medium file on top and push it back and forth while rotating the bottle 5-6 degrees for every stroke. Because of the high peak in the break this bottle needed to be held still with the peak under the middle of the file and extremely light pressure used for the first few dozen strokes. Picture 3 is after about minute sanding. Notice that the "peak" from the unclean break is gone but you still have some dimples in the top. Picture 4 is after about a half a minute more of filing. There are few lines after the file so now it is time to change to the fine file and file for half a minute more.
Step 5: Round the Top Edges.
After the top is flat and even I use 420 grit wet sandpaper wrapped around soft handle to round the top edges. Rounded piece of wood is also good. Hold the sand paper at a shallow angle and clean the edge, both inside and outside. Keep the sandpaper wet.
Picture 3 shows the finished edge.
This is not the only way to finish the edges of the bottles. If I had a clean break I used to use oxyacetylene torch to melt the edges but that is a bit of an art since you need to heat the whole piece of glass so it doesn't get stress fractures. Porcelain oven/furnace is very good.