Charon itself appears to be covered in frozen water, differing from Pluto's surface which is composed of frozen nitrogen, methane, and carbon dioxide. The most common theory is that Charon was formed from material that was blasted off of Pluto from a collision. This theory is similar to how scientists believe the Earth's moon was formed. Much like the Earth's moon, Charon keeps the same face pointed towards Pluto at all times, which is called "tidal locking". However, Pluto is the only planet that always presents the same face to its moon. Charon neither rises or sets, but appears to hover over the same spot on Pluto's surface. When it was initially discovered, Charon appeared as a slight bulge that would periodically show up on Pluto.
Luckily, a few decades after Charon was discovered, its existence was proven beyond a doubt when Pluto reached a new part of its orbit. There are only two parts of Pluto's 248 year orbit where Charon can easily be observed with telescopes. In the late 1980s Pluto and Charon passed in front of each other repeatedly for several years, allowing astronomers to make maps of each body. Unfortunately, Charon is so far from the earth that detailed images of it are impossible with current technology.
Charon is one of three moons of Pluto, the other two being Nix and Hydra. In January 2006, Nasa launched its New Horizons spacecraft to observe the Pluto and Charon system. It should arrive in 2015, becoming the first spacecraft to visit them. It is part of a NASA search to find additional moons of Pluto, and will incorporate ground-based telescopes and possibly even the Hubble Space Telescope.