Mushroom

Mushrooms are a type of fungi in minecraft. Mushrooms function as a decorative item in Creative Mode, a food/hazard in Survival, and a staple food item in Indev

Mushrooms do not grow in sunlight. Instead, they grow in places with little natural light, such as cave entrances, darker areas of an Indev "Forest" map, or in the shadow of other floating continents in the "Floating" map type. Mushrooms also grow in "Hell"'s extremely low light conditions. In rare instances while playing Infdev, mushrooms are sometimes generated growing under trees. Brown mushrooms may be generated in the open when exploring during night, at least in the latest Alpha version. Once the sun rises they are destroyed, leaving a mushroom the player can pick up. On the flip side, there have been several bug reports of mushrooms growing on top of trees in mid-daylight without being destroyed. Keep in mind that this is very rare in most cases.

Mushrooms can possibly grow after a map has been generated if the conditions allow mushroom growth. (Needs confirmation)

Also Pigs are apparently able to eat mushrooms, but this also needs confirmation.

Brown Mushrooms
In Survival, Brown mushrooms heal 2 and 1/2 Hearts. However, in Indev and Infdev A Brown mushroom is used along with a Spotted Red mushroom (and a bowl) to create Mushroom Stew which heals 5 hearts. Brown mushrooms are somewhat rare in all survival-based game modes.

A brown mushroom emits 1 light, just enough to make itself visible in pitch darkness. This may not be intended.

Spotted Red Mushrooms
In Survival Red mushrooms hurt the player for 2 and 1/2 hearts. These mushrooms can not be dropped and must be eaten to be removed from valuable inventory space. However, in Indev and Infdev, Spotted Red Mushrooms are used along with Brown Mushrooms and a bowl at a workbench to create Mushroom Stew, which heals 5 hearts. Red mushrooms are also somewhat rare in all survival-based game modes.