Random wazers can "beep" at you. One clicks on the icon of another wazer and you can message or "beep" or "honk" at them. Any person that does this is a fool, and should be demoted from adult to oversized child with stunted maturity. Also, your fb friends who use Waze can do this as well, just don't associate your fb account when you set up your waze and it will fix that problem.
The candy is an arbitrary thing that notifies you when you reach a point milestone. If you look on your account, there's a scoreboard page. You get points and ranks based on higher points. Points are earned for mileage, reporting things for other wazers to see, and other arbitrary tasks. Once you reach one of these milestones, Waze will populate a candy icon along your route. As soon as your car icon hits it, you are awarded those points.
The points essentially mean nothing, except your icon wears a different hat or crown when shown on other wazers map displays. That's part of the "social network" aspect of the app. Some claim that the higher rank you are, the better the app works for you; as far as routing, rerouting, or other notifications.
In truth, the higher ranking you are, the more your reports on the app are trusted to reroute others. Also, if you deviate from a Waze suggested route, if you're high ranking, it will use your route to adjust the algorithm in recommending routes to others, that's about it.