Boats
Most of the world is ocean, with open water thousands of blocks across between continents. There are four boats, all crafted, and they all work in multiplayer.

Canoe and rowboat
Paddled, so the wind doesn't affect them. You can fit a chest in.

Sailboat
One mast, one sail. The smallest boat that uses the wind.

Galleon
28 blocks long, with a gun deck, a hold for up to 12 chests and a crow's nest.
Sailing
Sails are driven by the wind. You can't sail straight into it, but you can sail close to it and tack your way upwind. The wind stays the same for minutes at a time and changes slowly, so you can hold a course.
Sail and rudder stay where you set them. The helm shows your point of sail and warns you if you're too close to the wind. A compass shows your heading, the wind direction and the way home, and a spyglass zooms in 5x.

Cannons
The galleon has sixteen cannons, four a side on the main deck and four a side below. Man a gun, aim with the mouse, load shot and black powder, and fire. A sight shows where the shot will land. After firing you have to swab the barrel before you can load it again.
Shots break blocks, damage boats and hurt players. Cannons can also be placed on land and fired with a wire signal. There's a flintlock pistol and rifle as well, which use lead shot and powder.

Damage
Boats get holed where they're hit, and you can see each hole. Hold planks to a hole to patch it, from outside or from inside. A galleon can take seven or eight direct hits before she sinks, and when she goes down her cargo, chests and cannons go with her.
You can also make fire ships: pack TNT into a small boat and light it, and it rows itself off and blows up on whatever it hits. Four charges nearly halve a galleon.
Decorating
Dye each sail its own colour. Add a figurehead (a gilt lion, a green serpent or a maiden), flags and pennants, rail lanterns that light up at night, gold trim and a ship's bell.
Pirate armour
Tricorn, coat, breeches and sea boots. As strong as iron, and the full set makes you swim 35% faster.