Bile acids are cholesterol molecules with amino acids bound to them to make them water soluble. They are loaded into Bile, stored, and released when fat is in the duodenum. There, the amphipathic nature of the molecule (the cholesterol end is hydrophobic, the AA is hydrophilic) allows it to emulsify fat, which is just a way to increased the surface area dramatically. This surface area gives more contact with the contents of Pancreatic secretions (specifically lipases here), which allows them to chew up the fat into TAGs into Glycerol and Fatty acids. These two, along with cholesterol, can passively diffuse into the epithelia of the jejunum and are packaged into Micelles, which are taken up by Lacteals (lymph vessels) and eventually reach the blood.
Bile acids aren't conjugated to glycine and taurine. 7-alpha-Cholesterol is conjungated to glycine and taurine to make Bile acids. If they aren't sufficiently water soluble, they wouldn't be that useful as emulsifying agents inside the gut - they'd just make the fat globs bigger by being absorbed into them, instead of breaking them up. When it comes to making cholesterol more soluble in bile, I think about it as follows
10 units of Cholesterol floating in Bile = Very likely to precipitate (they're hydrophobic and will try to shield each other from water)
3 units of Cholesterol + 7 units of Cholesterol bound to Amino acids (I.e. bile acids) = Much less likely to precipitate.
If you use a drug, like a fibrate, that inhibits the production of
Cholesterol 7-alpha hydroxylase, which manages the rate limiting step of cholesterol's conversion into a bile acid, then you make less bile acids and end up with more free cholesterol in the bile. This increases your chance of ending up with a bile gallstone. a similar risk exists when you use Bile acid sequesterants because than the Liver needs to make more cholesterol and bile acids from scratch and puts more cholesterol in the Bile.
Just for reference - none of this stuff is particularly soluble - From Wiki: The composition of gallbladder bile is 97% water, 0.7%
[1]bile salts, 0.2%
bilirubin, 0.51% fats (cholesterol, fatty acids and
lecithin),
[1] and 200 meq/l inorganic salts.
[2]. You can see how a small change in cholesterol can lead to a much greater chance of stones.