The following are the proper uses of tools, for all the newer miners out there. DO NOT make anything out fo gold, because it has fewer uses then wood. Hope it helps :)

PICKAXES- pickaxes are used for stone materials and stone materials only. if it is used on anything else, it will disintegrate twice as fast. ALSO, if you try to mine diamond, redstone, or iron with a wood pick, it will not drop anything.
wood- stone, coal.
stone- stone, coal, iron
iron- stone, coal, iron, redstone, and diamond.
gold- totally worthless, don't even bother.

AXES- only used for wood, and wood only. If you use it for anything else, it will disintegrate twice as fast. The only difference in the type of axe is speed.

SHOVELS- used for snow blocks, sand, gravel, dirt, soul sand, and mycileum. The only difference in the type of shovel is speed.

SWORDS- used for ONLY KILLING MOBS. If you try to destroy a block, it will disintegrate. swords disintegrate with each hit, but is more powerful then the fist. The only difference in the type of sword is speed.