Cookies can be used for authentication, storing your site preferences or anything else that can be saved as text data. Unfortunately they can also be used to track you.
You could turn off cookies completely or just shut off third-party cookies. But that would also keep out useful cookies that many web apps rely upon to work (like Google Mail or Calendar).
With Vanilla you can select which cookies you want to keep on a whitelist. All unwanted cookies are deleted automatically (or manually if you prefer).
If you close your browser often, follow the "recommended usage" on the options page to get rid of unwanted cookies whenever you close Chrome. If you seldom close you browser you should let Vanilla automatically delete unwanted cookies after 30 minutes.
Review on Lifehacker:
Here's a nice description on My Digital Life:
++ Cookie vs Local Storage ++
Beause of a limitation of Chrome its currently not possible to offer the same functionality for local storage that is available for cookies. If you would like to get this feature please star this Chrome issue:
If you run into problems:
+ Cookies should be enabled: in Chrome's cookie settings select "Allow local data to be set"
+ Make sure that you add your sites to the whitelist (include subdomains).
+ The site that stores your login might be different from the site you are using. E.g. if you log on to youtube.com with your Google ID you have to add both *.youtube.com and *.google.com.
+ If you want to contact me about a problem you can find my email address on the options page.
What's new in version 1.4.0?
+ Added French translation by Rémi Berthoz!
+ Added link to Betract (my other hobby)
What's new in version 1.3.2?
+ Source is now on GitHub
What's new in version 1.3.1?
+ Added an option to hide the omnibar icon.
+ Updated to comply with the new Chrome extension manifest.
What's new in version 1.2.0?
+ Fixed an autodelete bug.
+ Added an option to change the minutes for autodeleting cookies.
+ Changed the link for my iPhone game.
What's new in version 1.1.0?
+ Added support for localhost/intranet and sites with ports (at Michaels request).
+ Made the icon smaller (a longtime request).
+ Removed the donate coffee link from options (it wasn't a heavily used feature) and added a link to my Windows Phone 7 game.