Potion

Potions are craftable food items that confer specific effects in Minecraft. Potion effects were initially introduced in Beta 1.8. If Potions are hacked into the game and their damage value is changed, they will acquire effects. Potions are crafted using water and various ingredients combined in a Brewing Stand. As of Beta 1.9 Pre-release 3, potions can only have one effect. Because the data values for different potions were changed, Potions made in 1.9 Pre-release 2 will be altered if loaded into 1.9 Pre-release 3

There are 4 tiers of potion (e.g.: Speed I, Speed II, Speed III, Speed IV), but the present brewing system does not allow the production of level III or IV potions.

History
Alchemy was first hinted in July 2010, when Notch explained why redstone ore disintegrates into "dust". He states that dust will be used later in potions.

A couple months later, Notch did a Q&A session on Reddit. He was asked about Alchemy, and responded "Oh Yes! Definitely!". All of his posts in that thread are now deleted, but records can be found in other places.

Potion effects were introduced in Beta 1.8. Jeb later tweeted a screenshot showing potion durations and Glass Bottles taken from within Beta 1.9 Pre-release 2.

Originally Potions were to be brewed in Cauldrons. Jeb later tweeted that both he and Notch had come up with a different way to brew potions, which was revealed to be Brewing Stands.

In Beta 1.9 Pre-release 4, Splash potions were introduced. "You can turn any potions into Splash Potions by brewing Gunpowder into a potion (even Instant Health II). It appears in a different shaped flask. Instead of drinking it, you throw it like a grenade."

Potion type history
Based on information found in minecraft.jar/lang/en_US.lang (of 1.9 pre-release 3), all the current types of potions are listed below:

In Beta 1.9 pre-release 3: Potion of Swiftness, Potion of Slowness, Potion of Haste, Potion of Dullness, Potion of Strength, Potion of Weakness, Potion of Healing, Potion of Harming, Potion of Leaping, Potion of Nausea, Potion of Regeneration, Potion of Resistance, Potion of Fire Resistance, Potion of Water Breathing, Potion of Invisibility, Potion of Blindness, Potion of Night Vision, Potion of Hunger, Potion of Poison

Brewing
For ingredients that go into Potions, Splash Potions, and known Potion recipes see Brewing. According to Jeb there are 161 possible potion combinations in Beta 1.9 Pre-release 3, and there may be 2,653 potions in future updates.

Potion Effects
Potion effects are conferred by Potions, or alternatively through Splash Potions. As of 1.9 Pre-release 4, a player affected by a potion effect emits swirling particles the colour of the potion for the duration of the effect.

Trivia

 * Taking a potion while already under the effects of another potion does not add onto the effects time, but simply resets it. A potion effect will not "downgrade" if a lower level is activated. For example, if a player has Resistance III, drinking a potion with Resistance II will not have any effect.
 * An Instant Damage III Potion is powerful enough to instantly kill its victim(s).
 * Upon death, all potion effects are lost.
 * Using a portal to enter the Nether, the Overworld, or the End will cause potion effects to disappear.
 * A player can drink two potions quickly by switching to another potion immediately after drinking one, making it so that the second drinking animation will not be shown.
 * When you drink a potion, the animation uses the Eating animation, showing the Player "chewing" into the bottle.
 * As of Release Candidate 2, drinking a potion or milk makes a kind of slurping sound.

Bugs
If you toss a potion then go to a brewing stand, the potion will be back in your inventory.