The Mario Kart series utilizes the Mushroom as an Item that grants a speed boost. Also, it is one of the few Items that can steal a Balloon in Balloon Battle. Every Mario Kart has the Mushroom item, including Mario Kart Wii.
UsesThe obvious usage of a Mushroom would be to just boost ahead in the track to get your self closer to your opponents. Therefore, it's pretty much the basic recovery Item.
However, a more strategic use of Mushrooms is to cut through off-road areas that usually make you decelerate. Boosting through corners can get you a few places higher possibly, and when used on mega shortcuts (like in DS Delfino Square and Coconut Mall) where they are needed, you can gain a huge lead in the race.
During a match in Balloon Battle, Mushrooms can actually STEAL other enemies' Balloons and add them to YOUR collection. Otherwise, Mushrooms would be pretty useless, considering you are trying to hurt your opponents and not just drive past them in Battle Mode. You can steal as many as you want, but your Balloon capacity cannot go past 5, too bad.
There are also the dangerous Poison Mushrooms, seen in many Mario games. Sometimes, Poison Mushrooms disguise themselves as normal Mushrooms.