Sponge

Sponge is a block notable in Classic and Indev for being able to erase water within a 5×5×5 area.

Obtaining
The sponge currently only obtainable via Creative mode or inventory editing.

Future (1.8)
On June 8 2014, Jeb stated that he is re-adding sponges to survival for 1.8. They still clear water as they did before, though their mechanics are more complex than simply clearing a 5x5x5 area. They appear to remove source blocks only, not flowing water, in a 5x5 area, but if there is a barrier of some sort between the water the sponge is in and another pool of water (for example a solid block), the water in the other pool will not be absorbed. It will turn darker when it has absorbed water. The new sponges have undergone a slight retexture. It seems that the Sponge Block will be available in Survival Mode.

Obtaining
They can be found in Water Dungeons in a room in the Water Dungeon that will be added in 1.8. The Elder Guardian, a boss mob that will be added in the upcoming 1.8 release, will drop sponge upon death.

Smelting
Wet Sponge can be dried in a furnace making the sponge reusable.