It allows you to see through a single block. Just equip it, and point at a block like you want to delete it - instead of highlighting the block like it does now, you can peek through! (It turns mostly transparent, but ONLY for you) This way thick walls are a benefit, and you can make hiding places more interesting. You can also use it to scan walls for water behind them and hidden treasures and passages and stuff.
Could be used in Survival as a craftable item. Possibly in Sandbox too, for use while trying not to flood yourself? Just a thought.
edit It'd be interesting if you could also use it at a range. Scan that castle wall, ALL along it, to see all the guards inside! This means that thicker walls will be of even more benefit, but obviously they will take twice as long to construct...
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"I want to see forum posts saying "how do i kill dragon" with replies reading "lol"."
---> vede claimed Notch said this (and it is awesome).