A few years ago while on a tour in the Czech Republic I was given a bottle for my birthday by my (Czech) guides. I liked it, and worked my way through the whole bottle straight and at room temperature mostly, though I did add an ice cube or two once or twice.
Given the sweetness and various herbal flavors (primarily caraway if memory serves, but there is a lot of other stuff going on there), I would lean more toward soda than tonic water, if I wanted to dilute it. But I would either have it straight or on the rocks. Proof is not so high that it needs dilution, and the traditional way to drink it is definitely neat.
I cannot think of any cocktail combo that sounds tempting with the caraway and sweetness, but I wonder if it might make an interesting champagne cocktail variation - the bubbles and yeast complementing the liqueur. No need to spend a lot on the champagne, of course.
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Feeling (south) loopy