A Blockhead is able to run (or ride a donkey) across ice making it possible to cross oceans quickly without a boat. If a Blockhead sleeps on ice and it melts the Blockhead will immediately wake up.
Ice will despawn kelp growing where it forms. Fish and sharks tend to avoid forming ice, but may become trapped anyway and will eventually despawn if not freed. If a blockhead is completely frozen in ice, it will be still, but will slide up to the surface if it tries to move. Blockheads can still perform normal mining and crafting tasks in ice.
A fractionally filled block of water will freeze into a full block of ice. Prior to version 1.4, these blocks would melt into a full block of water. In 1.4, it was changed so they instead melted into the partial amount of water it froze from. If mined and then placed however, it would again melt into a full block. If there isn't enough to freeze, the water will disappear instead.
It is recommended to mine ice with a pickaxe for best results. The multiplier of gem pickaxes has no effect.
While ice can be used for construction, its tendency to melt in warm air makes it impractical except under arctic conditions. It has no known use in crafting.
Ice can be used to transport water without using a bucket.
Because mining and placing ice will refill partial water blocks, ice is part of one method of generating unlimited water (and therefore ice).
There is a glitch where, if a blockhead is swimming in a block of water when it turns to ice, the blockhead will regain all their air. However, they will not be able to move unless they mine out of the block or the block melts.
As water within range of cold air will turn into ice, it's not possible to "ice fish" by digging down to liquid water. What happens instead is an expansion of the ice and allowing more of it to be dug out. It's theoretically possible to build an underwater structure or completely empty even a large body of water this way, although care should be taken to avoid being submerged by a thaw.