A grass block using the Default texture pack.

Grass blocks are essentially mature dirt blocks. While dirt makes up the crust of your world, grass blocks are formed from dirt blocks which are touching other grass blocks. Grass will spread from block to block over time, and they can not be aquired in survival mode. In creative mode, however, you can place grass blocks from your inventory into the world. Grass is not used in any crafting recipes, and cannot be used inside a furnace in any way