Cobweb

The Web is a new item introduced in Beta 1.5. It was previously found in the Terrain.png file, but had no block ID assigned to it. It is not generated or crafted in any way, although it is speculated that it will be properly added in Beta 1.6. Current thoughts are that spiders will nest in it, shoot the web at you to slow you down, or drop it as loot.

Moving into a web limits your movement abilities. When you are "inside" the web, you will move at a speed equal to about 15% of the normal walking speed. Additionally, jumping will vibrate the player, akin to jumping in a 2 block high space. Unlike water, however, falling into a web will not prevent fall damage, although it will be delayed until you make contact with the ground.

History
Notch originally planned that spiders will produce webs

Trivia

 * It can be placed in and under water and lava.
 * You can put a web on sugar cane.
 * Rain won't pass through webs.
 * Jumping from high above into a web doesn't kill you, but the moment you hit the "bottom" of the web you take fall damage.
 * You can put webs on webs in-game.
 * Items thrown on the web will fall down after about 20 seconds.
 * A block of Sand or Gravel which falls or is shot into a web, will slow down, then destroy and become a resource after about 4 seconds. Primed TNT seems to be not affected by this phenomenon, as it doesn't disappear and will eventually explode destroying the web.
 * Animals that walk into the web will slow down, even spiders.
 * Minecarts treat it as a regular block, like glass or dirt.
 * You are unaffected by webs when in a minecart, except when they are in the way of the cart. This means you can effectively make a mob-slowing tunnel that you can ride through with ease, making safe rooms even safer.
 * You can only get webs by using an inventory editor in SSP or the give command on SMP servers that allow it.
 * Signs and paintings can be placed on webs.
 * When a player is in or behind a web, a Ghast will not see him/her.
 * Webs do not stop chests from being opened.
 * Jumping from as little as one block above a web, onto it, will induce half of a heart in fall damage.
 * Arrows shot do not go through webs or slow down.
 * Any kind of mechanism (excluding Dispensers and Note Blocks) can not be placed on top of webs.
 * There is a glitch that when the player flies over a web and then drops into it will allow them to hold the spacebar to fly straight up.