Sponge

Sponge is a block notable for being able to erase water within a 5×5×5 area. However, this function only exists within Minecraft Classic and Indev.

Sponge is only available as a normal building block in Classic mode. In Beta it is possible to be obtained via inventory editing, but its only use is decorative because it does not remove water, as this ability was designed for the Classic indefinitely-duplicating water rather than the Beta flowing water with source blocks.

History
Sponge is a type of building block added in the update to 0.0.19a client update on June 20th, 2009. Notch has hinted on adding a fully functional and obtainable Sponge to Beta in a future update. It was used as yellow for pixel art before yellow wool was introduced.

Properties
Sponge is not affected by gravity, unlike sand and gravel, so it will not fall if a block is removed from beneath it. Sponges do not need light to survive, and do not decay (sponges used to decay in the implementation of the 0.0.19a update, but this was changed within 50 minutes of the release).

As a building aid
A sponge can be placed around an area underground clearing the area of water. This can greatly help construction of underwater bases, homes etc. After the player constructed the structure, the sponges can be easily removed.

As an anti-griefing measure
A sponge can be hidden in walls, floors, etc. as a defense against griefers. This can confuse and slow down griefers when attempting to flood an underground development, leaving more time for them to be caught and stopped.

In small rooms, this measure, when implemented in every vertex of said space, can stop that room flooding altogether.



Future
As of the 1.8 Adventure Update, the sponge block might get obtainble again, as shown in the upper-right corner of the Item Selection Screen in the middle of this image, released during the PAX Prime 2011 (Aug 26th - 28th 2011)

Not much is known, nor if it will re-obtain its long-forgotten abilities.