Enchanted Book

An Enchanted Book is an item which allows players to add enchantments to weapons, tools, or armor by combining the enchantment book with one of said items on an anvil. The player can create an enchanted book by enchanting a book on an enchantment table. It is a book with the enchantment "glow" and a red ribbon.

Unintended Functionality (12w49a)
Enchanted Books can currently be used with items they shouldn't be usable with, e.g., you can enchant placeable blocks. This "enchanting anything" in SSP/SMP was a bug and has been fixed in 12w50a. This section outlines the consequences of using Enchanted Books on items they were not meant to be used on. Intended usage of Enchanted Books does not result in any of these issues.

Enchanted books only work on non-enchanted items.

Enchanted books do work on item stacks, after which the items will no longer stack with the same item having a different/none enchantment.

Some enchantments do not work, like flame or power (on either normal items and snowballs)

Efficiency and Silk Touch do work, but only on items that you can get drops from. So a dirt block with Efficiency V does not work on stone but does on wood.

Underwater breathing does work on every worn item, but only the helmet counts, so it works for mob heads. The same can be assumed for feather falling.

The Fortune enchantment does not work on shears.

Things that do work are Sharpness, Fire aspect, Looting and Knockback.

Enchantments are lost after changing the item. Emptying an enchanted bucket removes the enchantment. Enchantments are also lost after placing the block.

Using the Unbreaking enchantment on anything with durability will work, however. Enchanting a hoe with Unbreaking will make it last longer.

Effective combinations
Here is the list of the unregular, effective combination of enchantments and items.

Bugs

 * There was a bug that allowed enchanted books to enchant any item in the game. This was fixed for Survival, however, in 12w50a you can enchant items again but only limited to creative mode.