The Word of Notch has an update on the upcoming version 1.6 of Minecraft. He describes how Maps will work, which are the one new feature in the new version, which is mostly for bug fixes. here's word:

Currently, the map will only update if you’re holding it in your hands, but the map will kind of hide away when you’re looking straight forward. To see the map properly, you have to look down, thisly:

Any changes you make to the terrain will show up on the maps, but only once someone carrying the map gets near that area. In other words, you won’t magically get to see changes far away on the map.

At the moment the map doesn’t work at all in multiplayer, but that’s my next task. The code I write to support that will also be possible to reuse in the future for things like books and notes written by players, and possibly even custom paintings/hand drawn signs.