Experience Orb

Experience Orb is a feature that appeared in Beta 1.8. They appear as an orb that fades between a green and pale yellow colour. They drop when a mob is killed. Once these orbs are collected, they are added to the Experience Bar. It appears the orbs will fly at the nearby player of their own accord.

Upon the player's death, a number of Experience Orbs are dropped at the location of death. The amount of Experience lost can exceed the far left of the experience bar, and it can be reasoned that a player can lose one or more levels after dying. Experience orbs can be picked up when the player revisits the location of death before the orbs disappear. The number of orbs that are reclaimed is about the same number as the amount lost.

History
In a photo of the new lighting system, a small yellow (the orb was yellow due to a warm light from a torch) spherical shape can be seen on the left side of the screen, but a day after the photo was published Notch claimed it had an error and posted a new one, this time, without a yellow sphere. In a later tweet, Notch showed a picture of a beta 1.7 change-list (back then the adventure update was supposed to be in beta 1.7). Although it was completely blurred out and was, at first, thought of as a joke, but then Notch stated that one of the pictures with the new lighting system and the change list had a secret in them, and people all around the web started speculating.

One place that people discussed it was on the Minecraft forums, where it was discovered that the tabs at the top of the change list that were partly covered, could be decoded based on the 1 pixel tall pattern available in the image.

After a user named "tmcaffeine" successfully decoded it, the tabs read: ExperienceOrb.java, changelist.txt, Level.java, Tile.java, HugeMushroomTile.jav(a?), HugeMushroomFeature.(java?), RandomLevelSource(cut) Notch officially showcased it live at the PAX event in Seattle.

Trivia

 * The orbs will fly toward the player when within 4-5 blocks. This can block or reduce the player's vision when collecting many orbs (such as after dying).
 * The orbs, when dropped, will fade between the colors bright green and pale yellow.
 * Although mob drops spawn the instant the final blow is dealt to the mob, experience orbs do not until the mob entity disappears and the smoke appears.
 * Notch has said that Skill Points may be used for buying things.
 * Jeb has said that experience orbs are to be dropped only if the mob has been killed by the player, as opposed to a mob grinder.
 * When the player dies, all of the player's orbs will be dropped. In 1.8 Prerelease 1, this commonly caused the game to slow to such an extent it caused massive amounts of lag on SMP servers. This was  fixed in 1.8 prerelease V2
 * In Minecraft 1.8 Pre release 1 and 2, Mobs would drop experience orbs if they died from any cause. If a mob spawner was near lava and mobs repeatedly burned up, since experience orbs never despawn nor burn, it would cause a serious amount of lag and could crash Minecraft.