Minecraft wiki entry for Development_versions, associated text: Fully implemented multiple snow heights.
Drops one snowball for every layer of snow.
Each level of snow has its own height collision.
The topmost layer of snow does not have collision, so the player is always slightly sunken in the snow.
Visually, four layers of snow is the same height as a slab. However, five layers of snow have the same collision height as a slab.
Crafting recipe is 3 snow blocks in a row to create 6 snow layers.
For each thin layer of snow crafted, the player loses exactly half the snowballs required to produce it.