The file cookies.txt is used in Firefox 2 or below and in Mozilla Suite/SeaMonkey 1.x for storing cookies, which are lines of plain-text stored and retrieved by websites you visit.
Starting in SeaMonkey 2 and Firefox 3, cookies are stored in the database file cookies.sqlite. In converted profiles, cookies.txt data is migrated to cookies.sqlite. 
A typical line from the file might read (the spaces are tabs in the original file):
- kb.mozillazine.org FALSE / FALSE 1146030396 wikiUserID 16993
The meaning of the above line is as follows:
|kb.mozillazine.org||The name of the website (server) that stored the cookie.|
|FALSE||Whether the cookie can be read by other machines at the same domain (mozillazine.org); in this case, no.|
|/||The directory path for which the cookie is relevant; in this case, / denotes the home directory (i.e., the URL http://kb.mozillazine.org/).|
|FALSE||Whether the cookie requires a secure connection; in this case, no.|
|1146030396||The time at which the cookie will expire (the number of seconds since 12 a.m., January 1, 1970).|
|wikiUserID||The name of the cookie.|
|16993||The value of the cookie.|
This file can be moved to a different profile without any extra effort.
Deleting cookies.txt will reset (clear) all your cookies. A new file will be created on start up or when the application first needs to write to the file.
Related bug reports
- Bug 149544 - Protect/lock cookies from USER/PROGRAM deletion (i.e. "Remove all cookies")
- Bug 230933 - move cookies to mozstorage
- Bug 257288 - read-only profile files (cookies, bookmarks, etc) not respected, results in data loss
- Bug 297313 - multiple cookies files made in profile