Chamomile is a versatile herb medicinally that treats a plethora of common ailments.  Generally, there are three categories of use - as an anti-inflammatory for the skin, as an anti-infective for many common ailments, and as an anti-spasmodic for such problems as stomach cramps and indigestion.

Used in a Tea, or in Capsule form, Chamomile flowers are used internally for many common physical symptoms, including menstrual cramps, stomach cramps, indigestion, flatulence, diarrhea, fever, colds, congestion, headaches, insomnia, nausea, vomiting, stress, nervousness, and poor digestion.  For babies, it is helpful with symptoms of colic and teething pain.  

Externally, Chamomile flowers can be ground into a paste (grind with mortar & pestle and add some water or unsweetened tea - add oatmeal slowly as needed for consistency) and used to treat skin irritations such as ulcers, infections, rashes, and burns.  The flowers can also be used in a bath to ease the pain of hemorrhoids and cystitis, and the essential Oil can be applied to combat neuralgia and eczema.  To prepare a bath, put a handful of flowers in a mesh bag, hang it on the tap using string or whatever, and run the bath water over it.  Use the same bath water, or an unsweetened tea, on brown hair to create golden highlights 

Lastly, Chamomile flowers can be used in a steam inhaler for respiratory and allergic problems such as asthma, hay fever, and sinusitis.