Breeding

Breeding is an upcoming game mechanic in the next beta update of Minecraft. It will allow fed animals to breed with each other to make new animals of that species. Notch most likely for fun tweeted: "You know what would be fun? If every single animal in minecraft came from eggs. Breeding would involve moving egg blocks around."

At the moment, animals follow you if you have wheat in your hand. If you feed them the wheat, you enter the "love mode". Two animals in "love mode" will result in babies.