Locked chest

The locked chest was an April Fools block.

Breaking
When first introduced in Beta 1.4, locked chests were indestructible except to explosions, which allowed it to drop.

From Beta 1.4_01 up until its removal, locked chests were broken the same as normal chests.

Natural generation
In Beta 1.4, if the date is April 1st of any year, the game picks a random location to generate a locked chest in every new chunk. If the chosen location is air and has a solid block below, a locked chest will generate.

Usage
The locked chest's initial purpose was to direct players to the Minecraft Store. would result in the dialog box to the left being displayed.

This functionality was exclusive to Beta 1.4; all later versions did not trigger this.

Fuel
Locked chests could be used as fuel, lasting 15 seconds (or 1.5 items).

Issues
Locked chests are a removed block and as such issues relating to them cannot be fixed.

Trivia

 * Locked chests are a reference to the Mann Co. Supply Crates from Team Fortress 2, where a key must be purchased for $2.49 in the in-game shop called Mann Co. Store in order to open the crate.
 * This may have been what Notch was talking about in his Twitter post about a "silly secret project".
 * At the time of the locked chest being added into Minecraft, it looked identical to a normal chest. However, after Beta 1.8, when the chest model was updated to be smaller than a full block, the locked chest, a deprecated block at that point, remained with the old model, and as such became larger than an ordinary chest.
 * Unlike normal chests, locked chest luminates the world with a light level of 15. This was probably done to allow players to differentiate itself with normal chests.