Lava

Lava is a liquid like Water, however it has slightly different physics. It flows a bit slower than water, and makes the player take two hearts damage when in contact. Like water, Lava has a particle effect and can be carried and placed using a Bucket.

Spawning
Lava spawns in caves and sometimes on the surface in forms of Lava Pools bordered with stone, making them easy to detect. In old world types, Lava was very difficult to locate, as caves were not available. 'Nyan' was a popular seed featuring Lava, but cannot be used anymore due to being a pre-0.9.0 update.

Block Creation
When flowing Lava touches flowing Water, Cobblestone can be infinitely created and mined. If Lava touches the top of Water, smooth stone is created. When Stationary Lava touches flowing Water, or vice-versa, Obsidian is created.

Danger
When the player touches Lava, they will start to take 2 hearts of damage every second. The player will also get the fire animation on the screen, obstructing their view, indicating they are on fire. Mobs touching lava will get the same effect.

It is recommended that players carry at least one bucket of water with them when planning to mine where lava is found in order to combat the dangers of Lava. Quick placing of the Water can prevent players from dying.

It is extremely hard to get out of Lava, as one can not simply jump out like they do in water. It is possible to place blocks around the player to stop the flow, but this only works if the player is not in a Lava source block.

Trivia

 * If a block is placed onto a Lava source block, it will destroy the lava source and it will disappear. This is also true for Water.
 * Lava was nerfed in Alpha 0.3.3 due to a major fire bug, that would destroy the entire world.
 * Lava can be found more easily due to infinite worlds and lava pools
 * Lava was uncommon in Pre-0.9.0 worlds.
 * Lava has a bug where it can burn through stone in villages.
 * The damage taken can be reduced in future versions using 'Fire Protection' enchantments.