Once the Eggplant appears, the current level's background music changes to a strange chiptune-style piece.
If it is thrown at King Yama's face during the battle, it will transform him into a giant, immobile Eggplant with only two hit points and deal one point of damage as usual (effectively 1 HP), making the remainder of the battle a cinch, but of course this is offset by the difficulty of escorting the Eggplant into Yama's throne room to begin with.
The 'eggplant monster' texture from the game files. When the eggplant is thrown at King Yama, he transforms into a giant flaming eggplant.
Spelunky's creator Derek Yu has referenced several other games and movies in Spelunky, which has led some to believe the Eggplant is either a reference to the Nintendo game Ice Climber, which prominently features an Eggplant at the top of the mountain. This is further reinforced by the Eskimo Spelunker bearing an uncanny resemblance to Nana from Ice Climber. Alternatively, it may be a reference to the Eggplant Wizard from the Nintendo game, Kid Icarus.
Trivia
There are certain rare chiptune music tracks in each area of the caves that play much less frequently than the regular background music tracks, known as 'Mines egg', 'Jungle egg' and so on. The Eggplant chiptune is known as 'Ultra Egg'.
The Eggplant has no journal entry, despite being an unusual item of interest.
It is very fragile, and easy to splatter if not handled carefully.
Andy Hull, the lead programmer of Spelunky HD of the XBLA version had jokingly feigned ignorance of the existence of the Eggplant when asked about it on his formspring. Here and here and in livestreams, denying knowing anything about the item.
Derek Yu, the creator of Spelunky, confirmed the purpose of the Eggplant on his Twitter, after fans had discovered its effect on King Yama.
