Much like World of Warcraft's launcher, "Playable" means the launcher has downloaded sufficient game code and initial media for you to launch the game and start playing it.
Unlike "available" where you run into "loading walls" where the game client struggles to keep up with downloading media necessary for you to play, "playable" means it has downloaded enough data for you to play without hitting any "loading walls".
Setup (Red): Core game content is being prepared. You cannot enter the game at this time.
Available (Yellow): Major game content is not completely applied. You can play, but your game experience will not be ideal.
Playable (Green): Final game content is almost complete. You may experience a few issues with playing at this stage.
The "Playable" includes high resolution textures and other low priority flair:
Q. How is data assigned to each stage?
A. Data is assigned to each stage based on the relative need for that data. Red is required to get into the game, Yellow is data needed for baseline gameplay, and Green is for variants of base game data (higher-resolution graphics, alternate sounds, other flavor data). [1]
Therefore, "optimal" means it has completed downloading all available content and will not impact your play experience with background downloads.
(Information is from World of Warcraft's launcher, which uses the same technology)
In the release version of the game the item "Black Mushroom" is a component in creating the item "Staff of Herding." It is still an Easter Egg referencing Diablo 1 though, but also helps in crafting the item.
The full list of items needed to create the "Staff of Herding" are: Black Mushroom, Wirt's Belt, Liquid Rainbow, Gibbering Gemstone, Leoric's Shinbone, the crafting plans, and a 50,000 gold crafting fee. Additionally, the item can be "leveled up" per difficulty by finding the plans for that difficulty, using a created staff from the weaker difficulty, and paying the crafting cost to create the "leveled up" version of the staff.
List of requirements for the staff and its upgrades:
Staff of Herding: Requires Black Mushroom, Wirt’s Bell, Liquid
Rainbow, Gibbering Gemstone, Leoric’s Shinbone, and a 50,000 gold
crafting cost
Nightmarish Staff of Herding: Requires the Staff of Herding and a
200,000 gold crafting cost
Hellish Staff of Herding: Requires the Nightmarish Staff of Herding
and a 500,000 gold crafting cost
Infernal Staff of Herding: Requires the Hellish Staff of Herding and a
1,000,000 gold crafting cost
The total cost to craft the final version, the Infernal Staff of
Herding, is 1,750,000 gold.
It has also been confirmed that the staff is used to get to the secret level.
Best Answer
The best place to find Black Mushrooms is (as others have said) the Cathedral Level 1.
The Cathedral is randomly generated, so you'll want to explore Level 1 fully, and if you don't find it, leave the game and return. The Cathedral will regenerate, and you'll have another opportunity to find the mushroom.
If you've passed this area already, the best story checkpoint for this is "Act 1: Part 4 - Reign of the Skeleton King." You'll start in town, so use the waypoint in town to take you to the Cathedral Garden. Walk southwest, through the gate, and around to the front of the Cathedral. Open the door, and descend through the hole in the floor to get to Cathedral Level 1.
Arrowmaster also suggests starting with the quest "The Legacy of Cain," with the stage "Explore Cellar" - if you play through this quest to the checkpoint at the Cathedral, you'll shave a bit of time leaving and re-entering the game.