Squid is used for its natural black dye, together with salty but subtle seafood flavours. Most 'squid ink' that's available for culinary use is actually made from cuttlefish ink. It has a more gentle rounded flavour than squid ink, which can be too strong and metallic in nature.
This ink is essential for making dishes like Arroz negro - black rice. It can also be used in dishes with squid or prawns. And in risottos, pasta dishes or as an ingredient in making black pasta itself. It is also used in making squid stuffed in its own ink.
Use sparingly: 1g of ink will flavour approximately 100g of rice.