The Egg is the unit Larvae and Hydralisks turn into during the morphing process to another Zerg unit (Lurkers for Hydralisks). An Egg has a very high armor value, making it hard to kill. When a unit is about to hatch from the Egg it starts the "hatching animation", and during this animation the new unit maintains the HP percentage of the Egg. After the hatching animation completes the hatched unit is restored to 100% HP. If the unit being hatched is killed during the hatching animation, it will simply disappear without death animation. 
Egg will die when you cancel the unit it is morphing to, with exception of Lurker Egg in which case the Egg will change back to Hydralisk. This Hydralisk will maintain HP percentage of the egg. There is a bug report that when morph lurker command is given then immediately canceled right after, the resources spent will not be refunded. 
- Blocking a narrow passage.
- Pushing a unit away or through an obstacle.
- Morphing a Hydralisk to a Lurker Egg, or Larva to an Egg to prevent it from getting killed.
- An Egg triggers a Spider Mine and two Mines can kill an Egg.
First use of an Egg blocking a passage was seen at November 26, 2006 — YellOw/ Goodfriend vs. ShinHwA/ Dongrae on Vampire, SKY Proleague 2006 Ro2 Day 27 3set. It was pointed out in a TL thread “YellOw’s Larva Block”, with a short video and an interview translation. At the time, the Larva Trick was not known, but the Egg block originated from the specific Hatchery placement on the map.
Competitive Usage of Lurker Eggs
- Lurker Eggs are commonly used to block off a ramp to stall for time, or to deny base entry. This is seen in both Zerg vs. Protoss and Zerg vs. Terran.
- In a Hydra/Lurker build, if a Hydralisk is irradiated, morphing it to a Lurker Egg will negate any further damage done by Irradiate, though it will still injure other Hydralisks around it. Once the Lurker hatches, the Irradiate effect is immediately removed.
- In Zerg vs. Protoss, when fighting with small armies of Hydralisks vs. Zealots, morphing the attacked/front Hydralisks to Lurker Eggs saves them from dying and creates a pseudo-wall, preventing an easy advance of Zealots.
- The map Plasma contains a number of Lurker Eggs used to block the shortest Rush Distance between the bases. The Eggs on Plasma are neutral but can be destroyed like any other Lurker Egg; hatching is disabled for the neutral eggs. A way to bypass them was implemented into the map: because Eggs are considered units, they can be “floated” over by workers by issuing the orders to mine a mineral patch that is visible from across the Egg field.