Clocks and compasses are useless when used in The Nether or The End, as time does not change and there is no sun or moon.
In the 1.4.2 update, if you put a clock into an item frame, it will still work, meaning that this is a good way to make a wall clock.
The clock's texture is split into two parts - the clock body, and the dial. The dial part of the clock body texture is colored pink , which is used for binary transparency in game-some graphics. (In this case, the dial texture is an overlay for the pink section.)
The clock is perhaps most useful while you are underground: there is no real way to tell time underground, so this is a use for the clock.
Like compasses, they work in a crafting table, meaning you don't have to craft one.