Grass

Grass (commonly named Tall Grass or Long Grass) spawns on grass blocks in certain biomes. Grass is not a solid block, but rather an aesthetic plant that does not obstruct movement, similar to Sugar Cane, Dead Bush and Wheat. It occurs naturally and in larger quantities than the previous plants. Bone Meal can be used on a grass block to grow Tall Grass and occasionally Flowers on it and in its vicinity.

Tall grass has three variants (defined by their data value).
 * Grass (the most common)
 * A triangular-looking fern (also known as "living shrub")
 * A dead bush-looking plant that does not occur naturally. (not to be confused with the Dead Bush appearing in desert biomes)

All three variants will occasionally drop seeds when broken; a Hoe is not required to produce seeds from this block.

The non-naturally occurring dead shrub-looking variant is not the same as the Dead Bush. The real Dead Bush will generate naturally in desert biomes, on Sand, and will not produce any resources when broken. The Tall Grass variant is not naturally-occurring and even though it looks like a Dead Bush, it cannot be placed on Sand, and will drop seeds like the other variants of Tall Grass.

Water will destroy any tall grass (as well as vines) in its way, so one can easily clear large areas covered in grass by using a Bucket to place water, then pick it back up once all the tall grass in the vicinity has been destroyed. This can also be used for gathering seeds.

Uses
Harvesting Tall Grass is the primary way of obtaining seeds, the secondary way, being to harvest fully grown wheat. Because wheat drops many more seeds, tall grass becomes significantly less useful as your wheat farm expands.

Using Bone Meal on a grass block will generate tall grass (and flowers) on nearby blocks.

Tall Grass survives in block lighting 8 or higher. Although it may seem to survive in 7 or lower, a block update next to the Tall Grass will cause it to break.

Trivia

 * Tall Grass cannot be directly set on fire from lightning. However, fire from nearby blocks can spread to it. Oddly enough, the top of Tall Grass can be lit but it will not burn this way. When any kind of tall grass is set on fire, the fire seems to hover just over the grass, as if it were a complete block (it technically is a complete block).
 * Even if ferns do not produce seeds in real life (ferns use spores instead), they can drop seeds if broken.
 * The color of tall grass is biome dependent and is usually the same color as grass.
 * Tall Grass is slightly offset from the block it is sitting on (as seen in the second screenshot). Jeb has said this is probably intentional to give it a more "wild" appearance.
 * A "tall grass" mod existed long before the official release of tall grass, however, the tall grass generation code was not ported to the official game.
 * Tall grass can appear in caves on dirt near lava, and rarely, within a few blocks of bedrock.
 * In SMP, using bonemeal on grass in a spawn-protected area will still produce tall grass and flowers (Although there is no way to remove them afterwards)
 * Tall grass can be found on dirt blocks as well as grass blocks due to a bug in the terrain generation.
 * Tall Grass seems not to re-grow naturally. Bone Meal only grows regular Tall Grass, no matter in which biome.  Therefore, only regular Tall Grass is renewable.
 * On the Xbox 360 Edition, the dead shrub variant of tall grass is available in the creative menu.

Bugs

 * When broken with water behind it, the particles appear behind the water block.