Normally champagne is used. However, some of my non-alcoholic couples have used everything from grape juice to soft drink.
If the bottle is attractive, I ask one of the attendants to open the bottle in full view of the guests, pour it into two glasses and leave it on the table. At the appropriate moment a male attendant hands one of the glasses to the groom, while a female attendant hands the other to the bride.
Then when I say something like, 'Drink now, and may the cup of your lives be sweet and full to overflowing', the couples link their arms and drink.
Instead of the flute, I prefer the old fashioned champagne glass. It's said the saucer shape is based on a Madam Pompadour's shapely breast. In any case, the flute is both less attractive and impractical as far as drinking elegantly is concerned - especially when your arms are entertwined.
Here are the two party girls themselves. Madam and Marilyn.
To find out more about Wine sharing ceremony.