From ShaveWiki
What It Is
Alum, or aluminum potassium sulfate, is a crystal which actually has many uses. In the case of shaving, it’s used as an antibacterial and astringent, and as a styptic for small razor cuts or nicks.
An alum block must be wet when used, or applied by rubbing over wet skin. It will tighten skin and close small cuts/"weepers", and speed the healing of razor burn. Alum was originally very important because of its antiseptic properties -- in the age before widespread antibiotics, an infected razor cut could be serious trouble. In fact, one of the first patients treated successfully with penicillin was near death from an infected shaving cut [1].
Alum crystals (and therefore brands of alum block) are generally the same, regardless of the name or brand. Crystals can be more or less homogeneous, more or less pure, and easier or harder to crack, but they are all made from aluminum potassium sulfate.
Alum blocks and styptic pencils
Both an alum crystal and a styptic pencil are composed of a form of alum. Styptic pencils are usually made from anhydrous aluminum sulfate and are intended for slightly "worse" cuts or nicks.
How To Use
To use alum, one should either wet the face, wet the alum block, or both; rub the block over the skin a few times and wait a minute. One can then rinse the face and apply balm, aftershave, and/or cologne as usual.
Care of Alum Block
Because the alum block is a crystal, and because it is water soluble, the solution of water and alum can re-deposit on the edges of the block, causing sharp or rough edges. Drying the block after use, and/or wrapping the block in an absorbent cloth or tissue, can keep the edges smooth.
Other Uses
Alum crystals (either potassium or ammonium alum) are used as deodorants, because of the same antiseptic and astringent action that makes them useful for shaving. Alum is also used in pickling fruits and vegetables.
Keep Away From Children
Like many shaving supplies, keep alum away from children. If you think a child has eaten or swallowed your alum, seek immediate medical assistance for the child.
External links
Wikipedia entry on alum
Straight Dope article on alum