Slimeball

The Slimeball is an item dropped by Small Slimes. There are currently no uses for it, however they will be used to create sticky pistons in Beta 1.7.

0-2 slime balls will be dropped when a small slime is killed. Only small slimes will drop Slimeballs on death, and larger slimes will duplicate into smaller slimes (Beta 1.3 update changed it so no matter what item you use to kill a slime, the slime will still drop slimeballs). As slimeballs come from Slimes, they are a renewable resource.

Player-invented uses
Some multiplayer servers use these as tokens or cash, since they are otherwise useless and more immersive than a number reported in server messages. However, the ability for players to get free slimeballs from slimes may make this undesirable.

When in single-player, some players use them to show how many slimes they have killed.

In some adventure maps, slimeballs are used to keep score.

Crafting
Jeb posted on the Minecraft Forums that slimeballs will be used to craft sticky pistons and later released a demonstration video showing this.