<p>In what situation would it be more appropriate for me to use a bitset (STL container) to manage a set of flags rather than having them declared as a number of separate (bool) variables?</p>

<p>Will I get a significant performance gain if I used a bitset for 50 flags rather than using 50 separate bool variables?</p>

Well, 50 bools as a bitset will take 7 bytes, while 50 bools as bools will take 50 bytes.  These days that's not really a big deal, so using bools is probably fine.
However, one place a bitset might be useful is if you need to pass those bools around a lot, especially if you need to return the set from a function.  Using a bitset you have less data that has to be moved around on the stack for returns.  Then again, you could just use refs instead and have even less data to pass around. :)