What are gems for?

[brian14]

I think diamonds are used in a spell (Trap the Soul?). Do any other gems have uses other than sell them to an NPC? I got a diamond and two imperial topazes from an Orchard chest. Should I put them on AH?

[Visty]

gems are there to be sold, thats it
for trap the soul you use khyber dragonshards
in orchard, GH, desert and the 3 reavers refuge areas can drop a bound gem. you need any 3 of them to get flagged for sos

[Symar-FangofLloth]

Hit the 'Sell Gems' button at any vendor.
Anything that doesn't get sold is used for something. Everything that does get sold is only there for selling.

[Matuse]

Anything that goes into the gem bag is only used for selling to NPC vendors for cash. That is their only purpose. They cannot be used for anything else.