Obsidian is a type of block found in the update 0.28_01. It is coloured dark purple and blue.
Obsidian is never to be found in a generated map. It was originally thought that obsidian was cooled lava, which could emerge if it collides with water, however stone is actually created. Due to a new update, if water hits a lava spring, you shall get Obsidian.
In Survival mode, Obsidian takes longer to mine than any other material. Unfortunately it only gives you one cobblestone block.
In one version of Indev, obsidian blocks were used to mark the positions of the cardinal directions. This created two intersecting planes extending just above the surface of the solid material that surrounds them. Now, it appears they have been removed, replacement is unknown.
Obsidian may cause things to float.
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| — Notch on To-do list |
As of June 17 2010, Notch implemented Obsidian blocks as the outcome when Lava springs and water come together. It is impossible (unsure) to destroy an Obsidian block with any tool even if it's Diamond.