Recipes are used to create new items that you can wear or place in your House.
Recipes are found by defeating monsters and finishing certain quests within zOMG!.
Each recipe requires a certain number of different monster loot items (items you get when you defeat monsters in combat), as well as a some gold to compensate Nicu for his efforts.
Items created via recipe are not bound to your character in any way. They can be freely traded on the marketplace or given as gifts to friends.
To make recipes you have to go visit Nicolae at the Back Alley Bargains and click Make Recipes. You must have all the ingredients to complete the recipe. You can get ingredients in the marketplace or from fighting Animated.