The Corruption

 has a 50% chance of generating or being replaced by The Crimson with (generally up to three) random locations.

The Corruption is recognizable by its background with violet mountains, dead trees, purple grass and darker lighting than other biomes, and is the only biome in which one can find Chasms, Ebonstone, Shadow Orbs and Vile Mushrooms and music change.

Initially, the Corruption can spread to regular grass from corrupted grass so long as the blocks are adjacent. Corrupted grass will also occasionally produce thorns that deal 10 damage and grow indefinitely so long as they are within four blocks of another block.

The monsters found in this biome at any time of day are relatively strong, and are thus a good reason to avoid the Corruption at the beginning of the game.

left|350px Monsters found in The Corruption:
 * Eater of Souls
 * Little Eater (Replaced by different sizes and stats of the Eater of Souls in 1.2)
 * Big Eater (Replaced by different sizes and stats of the Eater of Souls in 1.2)
 * Devourer
 * Corrupt Goldfish
 * Corrupt Bunny
 * Eater of Worlds (Boss Monster)
 * Corrupter (Hard Mode)
 * World Feeder (Hard Mode)
 * Slimer (Hard Mode)
 * Corrupt Slime (Hard Mode)

Hard Mode Changes
After the Wall of Flesh is defeated in a World, the Corruption begins to spread at twice the normal speed, gains the ability to spread over sand and stone as well as turning mud into corrupted grass, and it becomes able to spread across gaps of "incorruptible" material up to two blocks long. Finally, all monsters slain in the Underground Corruption will have a chance of dropping a Soul of Night.

350px

Corruption Prevention
The best and cheapest way is simply by digging a horizontal hole, size: 6 wide, 3 deep and filling with any non-biome affectable blocks that cannot be bypassed/corrupted (or hallowed). Examples of blocks: Dungeon bricks, ores, bricks, clay (maybe), blocks that are acquired through crafting (most of them). This method works on ALL biomes and only takes 18 blocks per hole. Best block: bricks. The Corruption and Hallow cannot spread through clay, bricks, silt, and ash so you can use those materials to your advantage like making a barrier around your base. Sunflower method is outdated/ineffective/broken.

Another way is to cure the Corruption before defeating the Wall of Flesh, eliminating the preventatives needed to protect your base. However this is a rather hard alternative as, although it has the best results, it is time- and money-wasting, for little or no profit. Also, as the Hardmode spawns more Corruption, the original biome is not as worth clearing.

Another method is to spread the Hallow on the both sides of your house, as neither the Corruption nor the Hallow can spread across the other. I am not sure how this is better, since gastropods and others will annoy as much as the Corruption monsters.

A quick (depends on size) but expensive way to clear the Corruption is by simply blowing it up (with any kind of explosive save Grenades). However, this is very expensive and will leave a very big hole. Not recommended.

Another (potentially expensive) way to clear the Corruption is to use the Clentaminator to convert corrupted blocks to normal dirt and stone or Hallowed dirt and stone. The Clentaminator uses various colored solutions as ammo, all of which need to be purchased and cannot be crafted. Clentaminate everything, since biomes DO spread, but sometimes you WILL need that biome (for boss battle, vile farm, etc).

Artificial Corruption
An artificial Corruption can be created by planting Corrupt Seeds in dirt, and/or by adding around 250 blocks of Ebonstone. This will spawn all monsters from the Corruption, and can be used as a place to summon the Eater of Worlds. Placing any Artificial Corruption close to your home is dangerous as Devourers will spawn and attack you.

Items/Monsters that Spread Corruption

 * Corrupt Seeds
 * Thorns
 * Corruptor (No more true as of 1.2)

Hard Mode

 * Ebonstone (any number of blocks)
 * Ebonsand  (any number of blocks)

Update
In version 1.2.0.3: In version 1.2, several things changed:
 * The spread of the Corruption (plus the Crimson and the Hallow) is slowed after Plantera is defeated in Hard Mode.
 * Corruptor's vile spit no longer spreads corruption
 * The Corruption can sometimes be replaced by The Crimson on world creation. It's unknown whether the rules for the spread of the Crimson are the same as the rules for the spread of the Corruption.
 * The Corruption can spread to the Snow Biome by changing Ice Blocks to Purple Ice Blocks.
 * The Clentaminator was added. It allows you to spread the purity (Normal 'Forest' biome), the corruption, the hallow, and the crimson.