The Teleport option in the menu is a very important feature that should be used whenever needed. No items will be lost if you teleport, so it is a "get out of jail free" of sorts.
(NOTE: Pausing while online will just bring up the pause screen, the game will still be going. Make sure any Undead are far away before using this method of escape, as you can be killed while doing this action. Failing in doing so can result in death.)
Types of Teleportation
If you pause your game, there will be an option you can select called "Teleport". If you choose do so, you can choose to teleport either one of two options (three in multiplayer).
This option will allow you to immediately teleport to your original spawn point, which is normally 11 meters away from the original spawn tower. This is a viable option if all of the players would like to meet at one central location or if your house is near spawn. You may have a loading screen occur if you are too far away from the spawn. This is affected most by horizontal distance and vertical distance is a small factor.
This option immediately teleports you to the highest layer of blocks that has only air above it. This option is viable if you have trapped yourself in a cave without any materials and/or blocks, and it is most applicable when playing on singleplayer survival. You will rarely encounter a loading screen because you are simply travelling straight up, instead of horizontal as well.
Teleporting to surface is also a great way to penetrate any Alien Crash Site Biome.
Player (Multiplayer Only)
This option allows the player to teleport to any of the other 7 possible players on multiplayer. This can be a good tactic if a person joins a game, and all of the other players are hundreds or thousands of blocks away. You can also use this to get back on top of a tall tower that you have fallen off of. You will often have to wait for a loading screen because if they are close enough to avoid a loading screen, it would most likely be quicker and/or safer to walk instead.
- Dead body teleportation point is disabled in the 1.4 update.
- This can be used to recover dropped items from dead players
- Teleport to the surface to avoid getting cornered in caves, but you will still be seen by infected after you teleport to surface.
- It is good idea to build a tunnel at the spawn point to be safe when using Teleport To Start.