Compass

Compasses were added in the Seecret Friday Update 9 on September 10, 2010. The compass needle points towards the player's original spawn point, whether in your inventory screen, in chests, lying on the floor, or while holding it in your hand. Note that when a compass is in a chest, it will point to the spawn point relative the player's rotation when it opened the chest. When the compass needle is pointing straight "up" relative to the player, the spawn point is straight ahead.

If brought into The Nether, the compass' needle will spin wildly and point in random directions, making it useless for navigation.

You do not actually have to build a compass to use it for navigation. Just place the necessary components into their places on a crafting bench and it will point towards your spawn. This can save you some iron and redstone. One can also view the compass under the item statistics page, as long as one has made a compass at some point in the past. This method is useful since it requires no redstone, iron, or a workbench.

Sleeping in a bed will change your respawn point, but will not change the original spawn point and location the compass points toward.

Other than being used to find the spawn point, compasses can also be used to craft a map when combined with eight pieces of paper.

Trivia

 * The compass, along with the Clock, is one of the few tools you can stack.
 * A Compass will work in your chests.
 * A Compass can be seen by other people.
 * A Compass will point in random directions at random speeds in the Nether.
 * A Compass actually point the top right corner (when viewed from above) of the block you spawned on, not the middle.
 * Compasses held by other players will not show the same direction on the other people's screen than yours, because all compasses are relative to you.
 * As with the clock, once one has crafted a compass at any point in any world it is not necessary (although still convenient) to do so again, as the image in the statistics menu functions properly.