Cactus

Cactus is a block that was introduced Alpha mode and remains in Beta. The block has one texture put on all sides of the block, one put on the top, and a third on the bottom which looks like a simpler version of logs. It is found naturally on Sand that is not in standing water. It can be harvested easily by either mining the block underneath or directly by hand, provided you don't get too close. When the player or a mob touches a cactus, half a heart of damage is taken. When an item touches a cactus the item disappears.

Cacti grows only on Sand to a maximum height of three blocks, though higher stacks can placed by the player. Bone meal doesn't work on cacti and won't speed their growth. Cacti can rarely be found on a beach, but are abundant in desert biomes.

Cacti can only be placed either on sand or on other cactus blocks, with no horizontally or vertically adjacent blocks, with one exception. Cacti can not be placed on Sandstone. Cacti can be placed in water directly horizontally adjacent to other blocks, but that whole stack will break apart if any other block is placed on the cacti stack above that layer, including the cacti growing naturally.

Cacti will destroy any items that come in contact with it, if a player dies by cacti it is highly likely that some if not all of their items have been destroyed.

Cacti will grow if placed in water, provided they break the surface. Cacti placed in a one block depth of water will grow normally. A two block cacti stack placed at a two block depth will grow to the three block height. Any higher stacks at greater depths will need to be placed entirely by the player. An interesting use of this is that since cactus blocks are transparent, high stacks of them that break the surface can be used to extend sunlight deep underwater.

Cacti do not need light to grow and are non-flammable. As such, they grow well in the Nether, provided the player also brings in sand.

When the spot a cactus is placed in becomes unsuitable (e.g. a block is placed next to them), it collapses into a cactus block that can be collected and re-placed. Each mined block of cactus drops one cactus block.

Due to a biome bug (Only confirmed in Multiplayer so far), as of Alpha 1.2.1_01 in the desert biome a cactus can spawn floating in midair one to two blocks off the ground. However, the game will still think there is a cactus block under it, so the block directly under the floating cactus block is impassable, and can only be destroyed by destroying the visible sand block under it, or by placing a non-solid block underneath the 'ghost cactus'.

As of Beta 1.2, cactus can be cooked in a furnace to make cactus green dye.

History
Cactus was first seen in the Seecret Friday Update 5.

Before Seecret Friday Update 6,
 * Cacti could be placed anywhere, and did not have the requirement that the space around it be empty. This allowed cacti to be placed to form a damaging floor: both players and mobs take half a heart of damage when they walk on a cactus block. This made it useful for traps, such as a hallway with a cactus block floor, which would quickly kill any mobs that walk on it.
 * Mining cacti hurt the player.
 * The texture was different.

Farming
One can quickly farm cactus blocks. A single cactus block placed on sand will grow to a three-block plant after a set amount of time. Like sugar cane, removing the bottom part causes all parts above it to be removed as well, allowing for quick harvesting; one can also "shave" off the upper sections and leave the bottom section planted, but this is not efficient when mining cacti, because any dropped cactus blocks that touch the bottom section will be destroyed, just like any other thrown or dropped block that touches a cactus block. Swords can be used to speed up harvesting, but each cactus will consume two of the sword's uses.

It is possible to construct automated cactus farms. If there is space available above a 1 or 2 block high cactus, but there is a block next to where the new cactus block will be, then the cactus will grow and immediately break off, dropping a cactus resource around its base. Water flows can then be used to move the drops from many planted cacti to a single collection point.

A video example of this cactus farm is here: http://www.youtube.com/watch?v=B5114YYXNfE

Trivia

 * It is possible to spawn on a Cactus as they reside on Sand.
 * It is possible to manually place cacti on top of itself to the top of the map.
 * It is possible for a cactus to be generated on top of another cactus, which can lead to naturally occurring cacti that exceed their height limits. An example of an abnormally tall cactus can be observed at the seed "Sharpie" and the coordinates (-173, 78, 58).
 * It is possible to create two doors from one when placed next to a cactus atop a sand block. Why this happens is unknown, at least to me.

Kaktus