There are about 45 species of Sphagnum in Sweden, its Swedish name is 'vitmossa' meaning 'white moss' (white because that's what it is, as it's dry). Some Swedes are confused due to this. Around Christmas a 'white moss' is sold for decoration. However, this 'white moss' isn't Sphagnum, it's really a white lichen, a cryptogam.
Traditionally, Sphagnum has been used to treat wounds, as it has somewhat of an antibiotic effect. Dried moss can absorb a lot of water and does it fast (much more efficient that cotton).
Sphagnum is frequently used in potting material for orchids. The best moss is Sphagnum palustre, as it's very thick and dense.
When re-potting an orchid, slightly wet moss is but close to the roots of the plant. The plants is lowered down into a pot and bark-mix is filled up around to give support. Some people like to have the moss in pieces, evenly spread in the compost. Some put a layer of Sphagnum on top of the compost (around the plant) to minimize the evaporation of water from the root system.
The Sphagnum works in three ways: 1. keeping moisture, 2. as an aerating factor to loosen the medium. (As the moss dries, it shrinks; letting air circulate more easily through the compost.), and 3. having inhibiting effects on bacteria- and fungi contaminants (the moss is slightly antiseptic).
An ill orchid can in some cases be entirely rescued with Sphagnum! Use as fresh moss as possible. Clean the plant from any bad or dead parts. Slightly wet the moss and carefully tie it to the base of the plants (around the roots). Enclose the plant with a transparent plastic bag and let it rest in room-temperature until roots have developed. Light will stimulate the roots to grow. (Do remember not to expose any plants to sunlight, if they're not used to it.)
This can fully restore e.g. a tired Phalaenopsis with soft leaves. The leaves are soon vigorous again if the treatment is successful. When enough roots have developed, the plant can be potted up again.