They're made in sets of four, requiring four Wooden Arrows and one torch.
When fired, most arrows will break (40-50%), some will go out (30-50%), and a few will stay lit (20%).
Any wooden arrow fired from the Molten Fury will instantly become a flaming arrow, though they will still deal the same amount of damage as a regular wooden arrow.
Since you can get a surplus of gel really early in the game, you can put it to use making flaming arrows.
Dev, in his blog, said that flaming arrows will burn enemies, that makes the arrows much more usefull in the game.
Trivia
Wooden arrows fired from the Molten Fury ("Lights arrows ablaze") do the same amount of damage as a flaming arrow.
When having a pile of fire arrows and a pile of wooden arrows, arrange the ones you want to fire first earlier in the inventory (organized left to right, top to bottom), as the bow will fire whichever is first in the inventory.
