A pretty garden composed of mushrooms, flowers and a sapling
Decoration Blocks are simple 2d sprites that do not serve any construction support. Currently, Saplings, Flowers, Mushrooms and Paintings are all current kinds of decorations.
In creative modes, flowers and mushrooms do not serve any purpose except for their title. Flowers will dissapear unless on a lit Dirt tile, while Mushrooms will dissapear unless on a Stone, Cobblestone or Gravel block not under light. Saplings have a switch that will make them grow into trees. When on, the sapling must have adequate room for width and height and die unless on a lit dirt tile. When off, saplings will survive in any position- even mid air. Turning the switch off also prevents potential griefing. Decoration blocks can be used to block the path of a Fluid block as well, since the game treats them as a full block. Therefore, they could be used to clean up a area of a fluid.
In the alpha survival mode, flowers do not serve any purpose. Saplings are obtained from breaking leaf blocks and can be used to plant more trees to harvest. Brown mushrooms are found in caves and dropped by mobs, and heal 2.5 hearts. Red mushrooms are only found in caves and hurt the player 1.5 hearts because they are poisonous.
Currently in Indev and Infdev, flowers are still purposeless- although Notch has said they will be used for dyeing cloth later. Both mushrooms are required for making Mushroom Soup, and do not do anything when tried to use individually. Saplings are obtained through leaves and can be planted to grow into a tree. These two modes are the only two in which Paintings appear. Once one has been crafted, it can be placed on a wall and a random picture from a set will be put in it.
Bookcase Blocks are also considered decoration, as they serve no purpose anywhere.
*Note: decorations such as flowers and saplings will still grow in Winter Mode.