Powder is an explosive, like gunpowder. It explodes violently when contacted by Hot. Almost all of its combinations are explosive. It is also light, making it a good user element because it allows the 'user' to float and jump very high, and also to get carried away by Gas.
A strange glitch happens when Powder is combined with Elastic or Brittle + Elastic, it will either vibrate rapidly or tear itself apart/shatter as soon as it is touched by anything or moved by arrow. This is caused by an interaction with the standardDistance parameter, and is responsible for the Powder-Snow Reaction.
Powder is easily the most versatile and complicated material in the game, with no fewer than 8 separate Parameters having an effect on it's behaviour. Carefully tuning these parameters allows you to create things like sand, dirt, mud, clay, salt, icing sugar, and whatever other fine-grained substance you can imagine, as well as giving very fine control over how Powder explodes.
Adding Jet or Fuel to Powder allows you to see Fire in the explosion, increasing its visual value.