Silver Ingots are used to create tier 3 Armour and tools (same tier as diamond) but they aren't as good as diamond tools and armour.
You can create a Silver Ingot by smelting a Silver Ore into a regular furnace.
Silver Ingots can be crafted into their own set of tools.
To craft a Silver Shovel, Silver Hoe, Silver Axe, Silver Pickaxe or a Silver Sword you can just use the regular crafting recipes but instead of a normal "Iron Ingot" you use a Silver Ingots.
You can also craft Silver Armour out of these Silver Ingots, to do that you use the regular crafting recipe of every armour piece but instead of "Iron Ingots" you use Silver Ingots.