Minecraft wiki entry for Development_versions, associated text: Places blocks without the use of FallingSand.
Syntax: /setblock <x> <y> <z> <TileName> [dataValue] [oldBlockHandling] [dataTag].
Valid values for oldBlockHandling: "replace" to place the specified block (throws error message if the same block exists already), "keep" will only place blocks in air, and "destroy" will mine the existing block and drop an item before placing the new block.