Lavender stops your Sim from needing to sleep. Your Sim will get a moodlet and for the duration of this moodlet will not crash. This does not mean that your Sim will not be tired, as the motive does not stop decaying, but rather that they can push on until the moodlet disappears.
Peppermint gives your Sim the 'nice taste' moodlet. It doesn't really do anything else, but it can boost your Sim's mood and help to keep them from starving when out taking classes.
Sweet Grass cures too many herbs. Ironically, eating this herb will make your Sim stop being sick from eating too many herbs. If your Sim has a crash moodlet, drinking sweet grass will make it go away.
Greenleaf helps your Sim's metabolism. If your Sim needs to lose that extra bit of weight that he gained during that feast party on Snow Day, he can take Greenleaf and exercise to get back on the couch ASAP.
Ginseng gives your Sim an energy boost. Unlike lavender, Ginseng will not make your Sim stay up all night but will give you an extra few hours to play with them before sleep.
Wonderpetal helps your Sim in class. This herb can considerably help your Sim with his or her studies and help them ace exams. It also makes studying a breeze.
Licorice helps your Sim stave off starvation. It decreases the rate at which the hunger motive bar goes down and keeps them fuller for longer.
Chamomile makes outings easier and makes your Sims better with social groups. Especially handy if you have a Sim with the new 'socially awkward' trait - they will take all the help that they can get!
Buzzberry boosts your athletic skill. It is a great way to skill your Sims, especially those that are in the physical education career track.
Bumbleleaf is the only herb that can make your Sim immune to fires.
It also makes your Sim immune to the law - so if he or she is out painting murals on the ground or tagging walls, the police won't find them. Bumbleleaf may make your pyromaniac Sims feel a bit ill!
Basil gives your Sim a chance to feel ambitious and opportunistic. He or she will excel at work and other things of this ilk.
Cinnamon can give your Sim a boost in the romance department, putting them in the mood for romance. You can also do the Cinnamon challenge... be careful, things could go horribly wrong!