The Nether (previously known as The Nexus, The Slip and Hell) is a different dimension existing in Minecraft worlds, added in Minecraft Alpha version 1.2.0 on October 30th, 2010 (The Minecraft Hallowene Update).
Accessible via Portal, it can be used for quick travel on the above ground map. The Nether also contains Block types not seen anywhere else, as well as supplies of Block types found on the normal world, like Mushrooms, Gravel and Lava. The Nether is home to two mobs very uncommon on the overworld: Ghasts and Zombie Pigmen.
The Nether functions as a second map in a player's Minecraft World. When it is entered, the chunks from the above ground map are unloaded and the Nether chunks begin to load. Terrain generates infinitely here just like on the above ground map. If the player dies in the Nether, their items will stay there while they respawn on the above ground map.
The Nether works normally in Survival Multiplayer as of Beta version 1.6.
Entering The Nether while in creative mode will cause severe lag or cause Minecraft to crash altogether. When you enter the save again after a crash, the overworld will be the way it was when the world was newly generated. If you make another portal in the nether after a crash, you will have two seperate overworlds, the one in your new portal will be the way the overworld was before the crash. The second, after the crash.