Minecraft wiki entry for Caves_%26_Cliffs, associated text: Crafted from an amethyst shard and 2 copper ingots.
When used while held, it allows the player to see far away objects through a small square.
By pressing F1, the player can zoom in the whole screen; avoiding the border that is normally presented when using.
Switching to third person view while using the spyglass shows the player holding up the spyglass to where the eyes would be.