From my understanding so far, USE flags denote the additional packages that are pulled when you download a package.
To quote the Gentoo handbook directly, the idea behind use flags is simple:
When you are installing Gentoo (or any other distribution, or even
operating system for that matter) you make choices depending on the
environment you are working with. A setup for a server differs from a
setup for a workstation. A gaming workstation differs from a 3D
rendering workstation.
This is not only true for choosing what packages you want to install,
but also what features a certain package should support. If you don't
need OpenGL, why would you bother installing OpenGL and build OpenGL
support in most of your packages? If you don't want to use KDE, why
would you bother compiling packages with KDE support if those packages
work flawlessly without?
To help users in deciding what to install/activate and what not, we
wanted the user to specify his/her environment in an easy way. This
forces the user into deciding what they really want and eases the
process for Portage, our package management system, to make useful
decisions.
For everything you need to know to make effective use of them, please take a look at the following resources:
man emerge, probably). – sr_ Nov 9 '12 at 9:43