Glass

Glass is a decorative block that Sunlight can penetrate through; making it useful for buildings such as greenhouses. Glass blocks can be crafted by smelting a block of sand or obtained through trading with villagers. It has an almost completely transparent texture put on all six sides of the block. Glass blocks adjacent to other glass blocks are invisible when viewed through glass.

Glass will not hinder a redstone current from traveling down the side of a block diagonal to it.

Redstone Wire, Jack-O-Lanterns, Rails, Doors, Pressure Plates, Beds, and Ladders cannot be placed on glass, therefore it can be used for placing Redstone, ladders, torches or saplings on top on blocks that they can't normally be placed on like chests and furnaces by placing glass one block higher beside the chest/furnace and trying to place the Redstone, ladder, torches etc. on the side of the glass. This will place it onto the chest/furnace.

History
Glass was added in Classic 0.0.18a_02 and used to have the old texture:

In Survival Test, glass blocks could be broken very quickly and would drop a glass block to pick up. The only way to obtain glass blocks at that time was to place them on the map before the level was loaded in the client.

Before Beta 1.5_01, Rain used to fall through glass and other transparent blocks. Before Beta 1.6, when water was above glass, an infinite source could not be created.

As of Minecraft Beta 1.8, Glass Panes can be crafted by placing 6 Glass blocks in a rectangle.

As of Minecraft Beta 1.9 Pre-Release 3, Glass Bottles can be crafted with glass using the same pattern as Buckets and Bowls.

As of weekly Snapshot 12w08a redstone torches and normal torches can be placed on top of glass, but not on the sides. This still persists in version 1.2.5.

As of weekly Snapshot 12w21a, the block can now be purchased from Villagers.

Trivia

 * Glass blocks do not reduce the intensity of the light passing through it, aside from the normal decrease of -1. See Opacity.
 * When attempting to light glass on fire with the Flint and Steel, the durability of the tool is lowered without any flames appearing.
 * Placing a glass block on top of a chest does not prevent the chest from being opened.
 * Glass towers can create light underwater via sunlight.
 * Glass placed next to water running downwards will make the water run more quickly and violently; this can be useful in making traps.
 * When Glass is placed over a dropped item, the item is trapped inside the glass but can be retrieved normally.
 * Mobs (excluding Spider and Slimes) cannot draw line of sight through glass.
 * Narrow (1x1) towers of glass which mark Strongholds can be naturally found in worlds generated in Beta 1.9pre3. This is not a bug, but a debug feature which Jeb forgot to remove.
 * The texture for Glass does not support partial transparency as Ice does. If the Ice texture is applied to Glass then many of the blocks behind the Glass become invisible and you see The Void.
 * Hostile and passive mobs are unable to spawn on Glass, regardless of the light level.
 * Glass can be picked up using a tool with the silk touch enchantment.