How to get it
You can get it with a diamond pickaxe but it takes a long time to mine it. Obsidian is made when water hits lava (source block). If you don't mine it with a diamond pickaxe it will take around 4 minutes to mine and you won't get anything.
Obsidian is needed for making an Enchantment Table (4 blocks plus 2 diamonds and 1 book) and creating a Nether Portal (14 blocks in a 4 x 5 rectangle)