"Sings a different [song] every year. It's got to be a pretty boring life, hasn't it, being a hat? I suppose it spends all year making up the next one."
     -- Ron Weasley

Originally the pointed wizard's hat of Godric Gryffindor, the Sorting Hat was bewitched by all four of the founders of Hogwarts with brains and some amount of personality. It's function is to determine which of the four houses each new student will enter. It does so at the beginning of the start-of-term feast, when it is placed on a three-legged (sometimes four-legged) stool in front of the Great Hall. It then sings a long, rambling song of introduction, a different one each year but with the same basic information in it: how it was bewitched to perform the sorting and what the criteria are for the various houses. The first year students one by one place the Sorting Hat on their head. Within a minute, it loudly proclaims the house for which they are best suited.

The hat is battered and old; it's patched, frayed, and extremely dirty. In order to speak and sing, a tear along the brim opens like a mouth. It speaks inside of the hat with a small, quiet voice to the wearer and it can read thoughts and respond to them. When not sorting students, the Sorting Hat rests on its stool in Dumbledore's office.

There is more to the Sorting Hat than one might think. In an interview (http://www.infoplease.com/spot/harrypotter1.html) JKR said:

"The character you might be most surprised to see evolve is none other than the Sorting Hat. 'There is more to the Sorting Hat than what you have read about in the first three books,' Rowling says. 'Readers will find out what the Sorting Hat becomes as they get into future books.'"

In 1991, the Sorting Hat's song went like this (SS7):

Oh you may not think me pretty,
But don't judge on what you see,
I'll eat myself if you can find
A smarter hat than me.
You can keep your bowlers black,
Your top hats sleek and tall,
For I'm the Hogwarts Sorting Hat
And I can cap them all. 
There's nothing hidden in your head
The Sorting Hat can't see,
So try me on and I will tell you
Where you ought to be.
You might belong in Gryffindor,
Where dwell the brave at heart,
Their daring, nerve, and chivalry
Set Gryffindors apart;
You might belong in Hufflepuff,
Where they are just and loyal,
Those patient Hufflepuffs are true
And unfraid of toil;
Or yet in wise old Ravenclaw,
If you've a ready mind,
Where those of wit and learning,
Will always find their kind;
Or perhaps in Slytherin
You'll make your real friends,
Those cunning folks use any means
To achieve their ends.
So put me on! Don't be afraid!
And don't get in a flap!
You're in safe hands (though I have none)
For I'm a Thinking Cap!

A thousand years ago or more
When I was newly sewn,
There lived four wizards of renown,
Whose names are still well known:
Bold Gryffindor, from wild moor,
Fair Ravenclaw, from glen,
Sweet Hufflepuff, from valley broad,
Shrewed Slytherin, from fen,
They shared a wish, a hope, a dream,
They hatched a daring plan
To educate young sorcerers
Thus Hogwarts School began.
Now each of these four founders
Formed their own house, for each
Did value different virtues
In the ones they had to teach.
By Gryffindor, the bravest were
Prized far beyond the rest;
For Ravenclaw, the cleverest
Would always be the best;
For Hufflepuff, hard workers were
Most worthy of admission;
And power-hungry Slytherin
Loved those of great ambition.
While still alive they did divide
Their favorites from the throng,
Yet how to pick the worthy ones
When they were dead and gone?
'Twas Gryffindor who found the way,
He whipped me off his head
The founders put some brains in me
So I could choose instead!
Now slip me snug about your ears,
I've never yet been wrong,
I'll have a look inside your mind
And tell where you belong!