As I begin cooking more advanced recipes, I've stumbled across a few that required small amounts (tablespoons) of (expensive) spirits such as Cognac, vodka, etc. The problem is that I don't keep that kind of stuff lying around (Oh God, that would end SO badly). My question is this: When a recipe calls for small amounts of something expensive (like Cognac), what does it (generally) add to the dish? Also, what non-spirit related food items are good substitutes?
The primary purpose is for flavor. If it's the expense of a large bottle for a few tablespoons here and there you should be able to buy the mini bottles (as are served on airplanes) from a local liquor store.
If you don't want to use or have it around due to issues with alcohol then look for other items that have as similar flavor to substitute. Sherry has a sweet nutty flavor to it and apple juice can often work suitably well. Keep in mind you'll probably not find an exact flavor match but it can be close. A small amount of orange extract could be used in place of grand marnier. Depending on the item, you might also try flavored syrups that are used for coffee drinks. Remember that these have a lot of sugar in them so you'll need to compensate by cutting back on sugar elsewhere in the recipe and obviously don't use them where the sweet flavor wouldn't be welcome.
My guess is that most of those type of recipes get born out of someone experimenting with whatever is in their pantry.
For relatively small amounts compared to the whole recipe, substituting it with a cheaper liquor, vinegar, juice, stocks, syrup or extract probably won't have a large impact.
However, for best results, you need to be familiar with the type of liquor, and why it is a part of the recipe, in order to know what's is the best replacement for it. Is it included for the acidity, for the sweetness, for the boiling point, etc.
Here is a page that has some recommendations for substitutions. http://ezinearticles.com/?Clever-Substitutions-For-Alcohol-in-Recipes&id=3923408
You asked what does it [alchohol] add?
Vodka has good rep when using it in batter, I figure it's mostly because of it's neutral flavour and high alcohol content. See:
The good news is that you probably don't have to buy a premium vodka to get the same effects. Also the Heston Blumenthhal recipe mentions that the Lager beer is pretty effective (because of the bubbles), so perhaps you can just get away with just the lager.
Cognac --> Brandy Sherry and Port, I generally find a decent inexpensive one - Emu Sherry, Kopke port.
As far as vodka goes, I don't bother. Vodka is typically added to batters so that the alcohol evaporating drinks some of the oil out of the batter.
A much better option is to use 150 proof Alcool or Grain Spirits. It's cheap, and works better. (Usually sold as a home-made liqueur base)
I recently made several batches of fig bread that called for soaking the cut up fresh figs in sherry, and I still had a little on hand. The leavening was baking soda. I found with just that as leavening the breads didn't seem to rise as nicely as with b. powder so I did some reading up on leavening. This said leavenings need an acid and this is more complicated than I can explain because apparently the fruit itself plays a role too, but my point is that in some recipes that are leavened if you substitute I would think you need an equally acidic substitute. In general cooking, sherry etc I don't doubt adds flavor.
As for vodka, I don't remember what cooking expert said this, but using it in making pie crust instead of water results in a superior pastry.
I don't think these things go bad so if you cook a lot they should keep. I have had this bottle of sherry for cooking for years.