The properties of V-shaped optical dielectric waveguides are investigated in detail using a vectorial finite element method. The fundamental modes exhibit extremely tight, heart shaped near field patterns. The maximum intensity of the fundamental mode is found to be vertically shifted with respect to the geometrical center of the waveguide. Fundamental and higher order mode properties are extensively studied, including mode patterns, dispersion curves and polarization properties. The local mode polarization of the two fundamental modes varies from a horizontal (vertical) orientation at the groove center to TM (or TE respectively) far in the side wings. The optimal design of waveguides for GaAs/AlGaAs quantum wire diode lasers and Quantum Confined Stark Effect modulators grown on V-grooved substrates is discussed.