It cannot be reused as they break after the first shot, therefore it is mostly used for decoration purposes.
At Christmas time, Santa Claus may give them to you if you have been a good boy or girl.
Their value dropped significantly after Grynch Clan Goblin raids during Christmas.
When snowballs are used as weapons, they don't do any damage.
Snowballs were implemented with Update 6.5 when Snow Heaps were temporarily added to cities such as Thais and Edron as part of Christmas 2001. Due to players heavily misusing snowballs for powergaming, this event was not repeated the following Christmas.
Around the year 2004 or 2005 (before the walls of the mountains and many places were revamped, and you could use parcels everywhere to go up and down), there was a bug on Secura that a tree near Santa's House was deleted and players were able to reach one of the Snow Heaps. The snow heap was the source of snowballs, and that day many snowballs were created.
They became even more common when The Colours of Magic was implemented with the possibility of many creatures dropping snowballs for one week when Furb of Fun (orange colour) wins.
Finally, with the introduction of the Winterlight Solstice event in December 2018, Snowballs became much more available, since they can be created without limit by using Snow Heaps on the Percht Island.