Book

Books are crafted from paper and currently serve no gameplay purpose except in the creation of the decorative bookshelf blocks.

Though it hasn't been confirmed yet, it has been mentioned that with the new code Notch made for the maps he will be able to in future updates make books that players can type in and actually share with other players. The same thing can apply to custom paintings.

Crafting
Books are crafted from three paper in a vertical column.

As a Crafting Material
Books can be combined with Wooden Planks to craft bookshelf blocks.

Future uses
According to Notch, there may be practical uses for books as of the 1.8 update.