Grass

Tall Grass was implemented in the game in Beta 1.6. It spawns on Grass blocks in certain biomes. Seeds are no longer able to be produced by grass blocks and only spawn from harvesting these blocks. Little else is known about it, however. Tall grass isn't a solid block, but rather an aesthetic weed that does not block movements, like Sugar Cane, Dead Shrubs and Wheat; just occurring naturally in large quantities.

Tall grass has three variants, depending on its data value in the map.
 * Tall Grass (the most common)
 * A triangular-looking fern (previously labeled a "living shrub")
 * A non-naturally occurring dead shrub

It's important to note that the non-naturally occurring dead shrub variant is not the same as the Dead Shrub. The real Dead Shrub will generate naturally in desert biomes, on Sand, and will not produce any resources when broken. The Tall Grass variant is not naturally-occurring (can only be acquired through hacking the data files, or through mods), and even though it looks like a Dead Shrub, it cannot be placed on Sand, and will occasionally drop seeds when broken.

All three variants will occasionally drop Seeds when broken; a hoe is not required to produce seeds from this block.

Trivia

 * Tall Grass cannot be directly set on fire from lightning. However, fire from nearby blocks can spread to it.
 * The color of tall grass is biome dependent, and the same color as grass.
 * Tall Grass does not drop when destroyed, therefore it's impossible to replant it.
 * Tall Grass is slightly offset from the block it is sitting on (as seen in the third screenshot). Jeb_ has said this is probably intentional to give it a more "wild" appearance.
 * If inventory editing is used to acquire this item, the Dead Shrub-like variant will be placed, not the more-canonical Tall Grass variant.
 * It is currently possible to place blocks on top of tall grass, although said grass will (in most cases) get destroyed afterwards.
 * Tall Grass only appear in new chunks generated after Beta 1.6 has been installed.