Slimeball

The Slimeball is an item dropped by Slimes. There are currantly no uses for it. Notch confirmed that they are going to be craftable in a later beta update.

0-2 slime balls will be dropped when a small slime is killed. Only small slimes will drop Slimeballs on death, and larger slimes will duplicate into smaller slimes (Beta 1.3 update changed it so no matter what item you use to kill a slime, the slime will still drop slime). As slimeballs come from Slimes, they are a renewable resource.

Some users use these as tokens or cash in multiplayer servers, since it has no use and is more realistic, since server mods do not use up inventory space. When in Single Player, some players use them to show how many slimes they have killed.

There are plans and ideas that slimeballs could act as eggs, along with other uses. They could be thrown like eggs or snowballs and may spawn Slimes certain times. Some players use mods that allow this to happen.

Uses
If you throw them, they inadvertently do damage. Set the Slimeballs in a Dispenser, hook it to a pressure pad, and wait for an un-suspecting Mob to hop on by. This will throw the slime at the Mob and damage it. If your lucky, you will get to watch a Mob slowly kill themselves or weaken themselves for you to slay. In my opinion, its quite entertaining to watch a zombie wander onto the contraption.