I've used them in dashes (like say 3-5) for pies. I agree that it adds some positive oomph to the flavors. Substituting it for vanilla seems like it would be too much, but I'd be willing to try it.
Here's a "Splendid Table" segment on it that I happened to hear not too long ago:
http://www.splendidtable.org/story/use-bitters-to-add-flavor-complexity-to-food-not-just-cocktails