Spawn

Spawning refers to players and mobs being created and placed in the game world. Players will respawn on their spawn point upon death.

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 (x=0,y=0,z=0). In Alpha, the initial spawn point is always on a sand block and facing east. It is possible to relocate the spawn point, but relocated spawn points don't have to be on sand.

If the spawn point is occupied by a solid block, the player spawns in the closest 1x1x2 open space directly above the spawn point. This means a player can build a 1x1 tower in the spawn point to move the spawn upward as long as the tower still exists.

The spawn location can be moved horizontally if the player digs four spaces downward 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 also possible to relocate the spawn point using a Map Editor.

Players can find their spawn point in game by using a compass, or simply by dying and seeing where they show up.

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

In Beta multiplayer, the spawn point is a region of space instead of a single point. Players spawn in a random location in the region of space atop the highest non-solid block in an x-y column. This appears to be implemented as dropping spawned players from the sky with temporary invulnerability to avoid fall damage. Surrounding the spawn area is a no-edit area where non-ops are unable to modify the terrain. Attempting to modify the terrain as a non-op is a one way of determining where the spawn area is.

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 can spawn on any block with a light level of less than 7, except Glass or Stone Slabs. They will not spawn if difficulty is set to 'Peaceful'. There are also Monster Spawners in dungeons that are a fixed spawn point for enemy mobs.

In The Nether, Ghast and Zombie Pigman spawning is independent of the light level.