Mushrooms are common healing items that restore the user's HP or other effects. They have many types and colours, and can be used in a variety of recipes.
A Dried Shroom is a Mushroom that has shriveled and dried over a period of time. For example, in Paper Mario: The Thousand-Year Door, Petuni's Mushroom she planned to give to Punio dried out while he was gone, even though it had been quite healthy earlier. These Mushrooms heal 1 HP.
This is a normal, run-of-the-mill, Mushroom. They are the most common type, and appear in all three Paper Mario games. They heal 5 HP in the 1st 2 paper mario games. They heal 10 in Super Paper Mario.
Super Shrooms are a better, more advanced type of Mushroom then the Mushroom and Dried Shroom. They cost a little more than regular Mushrooms, but heal 20 HP.
Ultra Shrooms are aguably the best kind of Mushrooms, as they are rare, expensive, and heal a whopping 50 HP.
Life Shrooms are somewhat of a "last save", as they heal you or your partner by 10 HP after you are defeated in battle. They do not need to be used manually, as they save you or your partner automatically after you are defeated. In Super Paper Mario, they are able to be used without dying.
The Slow Shroom heals your health gradually rather than all at once.
Volt Shrooms are a strange type of mushroom, as they do not heal HP like most others. Instead, they electrify the eater, causing that user to do damage to all that attacks him/her.