Like most blocks, black sand remains where it's placed even if all support under it is removed.
Black sand will function as regular sand for growing flax.
The relationship between iron ore and black sand is circular but inefficient. Three pig iron and one sand can be turned into one black sand, two black sand can be turned into one iron ore, and one iron ore with one crushed limestone can be turned into one pig iron. Completing this circle from black sand to black sand loses one sand, three crushed limestone, five black sand, and the required fuel.