It is a Kiddish Cup that is used when saying the prayer for drinking wine. The inscription is in hebrew and is pronounced "L'Chayim", which means To Life. First you say the motzi (prayer) for the wine, "Baruch ata Adonai Eloheinu, Melekh ha'olam, boreh p'ri hagafen". Then you say the toast "L'Chayim" and drink. At home, the motzi is said on Friday nights before the Sabbath meal and on holidays.