Pipe Bomb

The Pipe bomb is a powerful home made explosive that doubles as a diversionary device. The design is based off a stereotypical pipe bomb, but with the gutted remains of a smoke detector taped to it. When it is thrown, any Common Infected not already in melee range of a Survivor will be attracted to it. When the fuse is depleted, it will detonate and kill all nearby Infected. The Pipe bomb may also damage Survivors caught in the explosion radius. The Pipe bomb can be an extremely useful weapon in many situations. You can use it to defend victims of the Boomer's bile, since the common infected summoned by the bile will chase the pipe bomb in preference. It can be used for clearing out an area of Common Infected, for conserving ammunition, and for crippling a Horde, particularly when being attacked from multiple directions or during a Finale.

According to the game's developer commentary, the Pipe bomb did not have the flashing light when it was originally conceived; instead, it served as a conventional grenade. There were some issues with this however: rushing infected would ignore the grenade, and often run past it, making the pipe bomb useless unless perfectly timed. Another, worse, problem was when the infected not only ignored the grenade, but kicked it back toward the thrower (not in a literal sense, but it would bounce off of them). Valve fixed the problem by making the Pipe bomb attract Common Infected, and added the oxygen tank to perform the role of the earlier pipe bomb.

Tactics

 * Hold on to Pipe bombs until attacked by a large Horde. The effectiveness of the Pipe bomb is proportional to the number of Infected nearby.
 * If there are Common Infected who are visibly unable to reach the Pipe bomb before its detonation, shoot them as they are running so that there are less leftovers to kill. Large groups can be thinned out quickly this way. A pipe bomb can be combined with a Molotov cocktail for a similar effect.
 * Throwing multiple Pipe bombs at once is inefficient, as Common Infected tend to run towards the first one thrown. Let your teammates know when you are going to throw a Pipe bomb.
 * During a Finale or Panic Event, throw the Pipe bomb when most of the Horde are on their feet. If a Common Infected is climbing when a Pipe bomb is thrown, then they will finish climbing before they run towards the Pipe bomb and therefore they may not reach it in time.
 * The Common Infected who are not killed by the explosion are stunned, and therefore very vulnerable to attack.
 * Apparently, depending what difficulty you are on the kill radius differs.
 * Note that Special Infected, in campaign or single-player, will not be attracted by the pipe bomb. Molotovs or gas cans are preferable in these situations.
 * In Versus Mode, the distinct beep of the pipe bomb will make them almost useless against infected players, as they can easily avoid them, or even run right past them.
 * During a finale, it is always good for at least one player to hold onto a pipe bomb until the Rescue vehicle arrives, then to use it. This will distract the Horde long enough to get in the rescue vehicle.
 * Any Infected that are already within attacking range will not be pulled away by the pipe bomb when it is thrown. Use your melee attack to push them away before throwing the bomb to cause them to chase after it. While they may still be stunned by the melee long enough to avoid being liquefied by the blast, at the very least they will be drawn away from you and will forget you long enough for you to gun them down.
 * If timed perfectly, a pipe bomb will stun an oncoming tank (much like when you melee a common infected). The Tank will become stunned and knocked back a little, long enough for you to fill him with lead.

Trivia

 * If you want some laughs, throw your pipe bomb at a infected who isn't attacking you and it will "dink" off and the zombie will twitch a little.