Survival mode is not yet implemented but is expected to come with the Beta release.
The only known information of this game mode comes from a segment of Notch's blog.[1]
What Is Known
-Multiple Difficulty Levels
-Roaming NPCs
-Tools and Weapons
-Health
-Drowning is possible, as well as dying in lava
-Blocks will require resources, so you have to mine/chop trees to obtain them
-Ore will have a function