The milk simply looks like ordinary white milk from the real world. It comes from sea snails and it makes people fall asleep quicker. It is best served warm.
Role in episode
SpongeBob drinks snail milk to fall asleep faster after trying everything else in the book that he read. Within the first few seconds of drinking it, nothing happens. However, after SpongeBob screams about how he cannot go to sleep, the milk makes him go right to sleep.
Originally, there was going to be a scene where Gary the Snail either was shown being milked or the aftermath of being milked for the snail milk featured in "New Digs." This was most likely removed as it would have been disturbing and Gary is a male snail, so it would not make sense.
In the 2012 R-rated drama mystery film, Flight, the scene where SpongeBob drinks snail milk, is seen on television when the main character is changing the channel at a hotel room.