Glowstone

Glowstone (formerly known as Lightstone, Brittle Gold, Brightstone, Australium or Brimstone) is a golden block that glows indefinitely. This block can only be found naturally in The Nether. It generates on the undersides of netherrack, commonly near lava, and forms unusual coral-like stalactites. Glowstone has a luminance of 15.

Glowstone clusters can be found either very high, or at almost ground level. It may be located over lava or in extremely high places, making it difficult to harvest.

Breaking this block drops Glowstone dust, which may be used to re-craft the glowstone blocks. Glowstone itself has no use in crafting; however, unlike torches, it isn't destroyed by water and continues to emit light even when submerged like Jack-O-Lanterns. Like all non-sunlight light sources, Glowstone blocks will cause nearby snow and ice to melt.

Uses
Glowstone is an infinite light source, but has a higher light level than Torches do (which is only 14.) Because it is a block, users often make ceiling lights out of them, by combining it with a Fence block. Also, in many mods it is often re-textured to look like a cube-shaped lamp. Glowstone blocks are also used as lit paths, due to their interesting texture, and also in docks or harbors so users in boats can see where to stop, as it can be placed in water.

When used with a Redstone Wire and Switch combination, it can be turned into Soul Sand. Even when the Redstone is removed it will remain as soul sand. Using this method one could create a form of [Sand Trap] that can be turned on and off at one's leisure.

Trivia

 * Glowstone could potentially be an item requirement to craft a lantern, as it also provides an infinite source of light. This would also make lanterns relatively inaccessible and a risky item to get, as has been hinted at by Notch.
 * Glowstone gives off the same amount of light as sunlight.
 * As of the beta 1.6.6 update, the tool used to extract Glowstone (Dust) changed from a sword, when it acted like a glass type block, to a pickaxe, as it is now a stone type block. In the same update, the amount of Glowstone Dust needed to craft a Glowstone Block changed from nine to four, and the amount of Glowstone Dust dropped after destroying a Glowstone Block changed from 1 to a range of 2 to 4.
 * Though it requires a pickaxe to get, you could redirect a Ghast's fire ball at a Glowstone desposit. This could be useful if your pickaxe is running low, you don't have a pickaxe, or the Glowstone is very high up.
 * In the coding, Glowstone Blocks are referenced as "lightgem".