What is it?
Wasabi is a Brassica which is sometimes known as Japanese Horseradish. The taste is not unlike horseradish - it has a dry, fiery heat much like mustard, and can be an acquired taste even if you like hot foods. Wasabi is often grated using a special tool into a fine paste, then served as an accompaniment to dishes, however pure wasabi is very expensive, so many everyday wasabi pastes are only made with horseradish, or a very small dilute amount of wasabi.
Wasabi grows submerged in water, so farm fields must be flooded and the water maintained, which is one of the reasons this stem is so expensive. Wasabi is often sold in a tube, but most traditional sushi restaurants will buy the fresh stem, or a powder made from wasabi which can be rehydrated into a paste.
How is it used?
In the past, wasabi was served with sushi and other raw fish dishes as it was thought to kill off bacteria and parasites present in raw fish, not because of the taste. Nowadays, the storage and cleaning of raw fish means it's unlikely to have any parasites or bacteria if it is from a reputable supplier, so wasabi is not necessary, however many people now enjoy the taste of wasabi.
Many traditional sushi restaurants still serve fresh wasabi with sushi and sashimi, more expensive and purist restaurants will grate the fresh wasabi to order, often using fine and coarse dried shark skin as a grater.
Wasabi is now prized for it's flavour, and can be used in a wide variety of ways. In Japan, there are many Wasabi flavoured snacks, such as Wasabi Peas and wasabi coated crackers which are very popular. Some fusion food restaurants also serve wasabi with steak, or mix it into sauces like fresh mayonnaise to make exciting accompaniments to food. Meats can also be cooked with a wasabi coating.