Sword

Swords are weapons used to kill mobs or players (if multiplayer PvP is on) quicker, but are not required to defeat them. They also can remove several blocks faster than using bare hands (such as leaves, wool, glowstone, and Soul Sand), but instead of one use of the Durability Bar, it counts as two uses. Killing larger slimes with a sword will also prevent more slimes from spawning. In The Nether you can find Zombie Pigmen that use Golden Swords, but they do not drop their swords when killed. Because mobs require fewer hits to kill with higher level swords, you will use these swords less, which causes diamond swords to last an extremely long time.

Stone (or better) swords revert minecarts in one hit with no decrease in durability, whereas wooden swords require two hits.

Crafting
Swords are created with 1 stick and 2 units of a tool material:

The following table summarizes the damage that different quality swords inflict.

As of Beta 1.5, all melee weapons, including the hands, do half a heart more damage, making the stone sword as effective as the iron one at killing mobs with 10 hearts of HP(3 hits).

Combat
As swords require close quarters to deal damage, fighting with a sword is inherently more dangerous than using a bow and arrows; however, this is offset by the sword's potential to do far more damage per strike than arrows can. Fighting hostile mobs is generally best done by striking as soon as the mob gets withing striking distance and then immediately backing up a few steps. This combined with the knockback of the attack puts some good distance between you and the mob giving you more time to set up the next blow.

Schwert