Spawn

Spawning refers to players and mobs being created and placed in the game world. Players will respawn on their spawn point upon death with all their items in their inventory dropped and scattered around. Like all dropped items, they will disappear in 15 minutes if not collected.

Spawn Point
When the world is generated, so is the player's spawn point. The player's first view of the map will be their spawn point by default. This location can be changed if the player digs three spaces downwards from it. However, this will only move the spawn point a few blocks away from the original position; it is not possible, using this method, to dramatically or controllably alter the location of the spawn point. It is possible to relocate the spawn point using a Map Editor. In Alpha, the players' spawn point in always on a sand block and facing east.

Players can locate their spawn point in game by using a compass.

In Multiplayer, the spawn point can be set by administrators and can even be a Spawn jail.

Mobs
Mobs spawn no closer than 24 blocks, in a 144 x 144 area around the player's location after a short delay. A player running through the game world will usually keep ahead of the waves of mobs spawning. Mobs are removed if they become more than four chunks away from the player.

Passive mobs
Passive mobs will spawn in grassy areas with a light level of more than 9.

Enemy Mobs
Enemy mobs on the surface spawn on any block except glass or half Steps with the light level of less than 7 if the difficulty is set to anything other than peaceful. There are also Mob spawners in dungeons that are a fixed spawn point for enemy mobs.

In The Nether, Ghasts will spawn regardless of light level.