I have not seen a thread devoted to crafting, so I'd like to start one. I know Notch had said that crafting will most likely not make it into the 1 September release. However, in the unlikely event that he finds some spare time afterwards during bug fixing to implement new features... :-)
I have some ideas for crafting items that require intense heat. Other crafting techniques I'm not sure about.
Anyway, to craft metal items or glass, one must construct a forge. This would simply be an isolated lava block. One places the item to melt into the forge. This will give the player a choice of which item to pull out:
If a player places ore into a non-isolated lava block (i.e. it is adjacent to at least one other lava block), the ore dissipates into the rest of the lava - and no items can be pulled out. Similarly, if lava touches an adjacent ore block, it becomes lava, too.
Note: this is an ultra-simplified version of a forge. Ideally, you'd have a crucible, forceps, anvil, hammer, etc. But we're talking about what Notch could implement in a couple hours, not weeks.