Mycelium

Mycelium is a block similar to grass, but it is only found natively in Mushroom Island Biomes. It can grow over dirt blocks that are in proximity in a similar way to grass.

Behavior
Mycelium behaves in a number of ways:
 * When harvested, it will yield one dirt block, unless harvested using an enchanted "Silk Touch" tool which has a chance of dropping a Mycelium block (otherwise can only be acquired via inventory hacks, or SMP commands from an op).
 * It slowly spreads out to cover bare dirt blocks. Because Mycelium is only found in Mushroom Land biomes, providing it with a dirt path to grow into or using pistons are the only "legitimate" ways to grow it outside the Mushroom Land biome. As of Beta 1.9 pre-release 4, it can be harvested by any tool with the Silk Touch enchantment.
 * It grows faster when light is near, unlike the habits of real fungi.
 * When covered in snow, the sides will use the same texture as snow-covered grass.
 * When placing a grass block in mushroom biomes, it will turn into Mycelium.
 * It is extremely sensitive to water. In the time it takes a Water source block to fully spread out and recede on flat land, 20-40% of Mycelium blocks under the water will have reverted to dirt.

Other behaviors:
 * Saplings and Flowers cannot be placed on Mycelium, but Mycelium can spread beneath them, which causes them to drop as items from the spot.
 * Mycelium is also the only block on which mushrooms can stay when an adjacent block is updated despite a light level that is too high for the Mushroom to remain.
 * Mushrooms spread faster on Mycelium than on other blocks.
 * Mycelium cannot be tilled with a Hoe.
 * The tops of Mycelium blocks have a particle effect that resembles tiny spores being released constantly from the surface. This effect persists even when the Mycelium block is covered in snow.
 * Mycelium and grass do not replace one another.
 * Unlike other dirt-like blocks, Mycelium does not harvest at a higher rate using a shovel, but still does using a sword. It is unknown if this is intentional or a bug.
 * Generated caves and ravines in a Mushroom Biome will not remove Mycelium, often leaving a thin layer over a ravine or 'bars' of Mycelium covering a cave.

Trivia

 * As of 1.9 pre release 5 Mycelium is a selectable block in the creative item list.