Tin Ore is the first tier of alternate ores. It is used to craft various weapons, tools, and armor. It is a material added in 1.2. It is found in abundance on and just below the surface, as well as in most caves. When a new world is generated, there is a chance that it will generate instead of Copper Ore. Tin is one tier below Lead. It is, however, possible to obtain the alternate version of each ore tier that is not actually generated in your world by using the Extractinator.
You can smelt three Tin Ores to make a Tin Bar using a Furnace. With this, you can craft the first alternate tier of armor. You can also combine Tin Ore and Stone to make a Tin Brick.