apartment therapy changing the world, one room at a time

I don't think you did anything wrong. I can't remember off the top of my head, but I think your resulting crystals has something to do with the environment it's stored in. I would try sticking the jar (sans lid) in the microwave for a 30 seconds or so. It should melt the most of the crystals and make is usable again. You can do the same thing with honey that has crystallized to make it pourable again. Keep an eye on it though in the microwave, it will boil quickly and you want to stop it before it gets to that point. Use gloves or a pad to remove, hot sugar is very hot.

Alton Brown sometimes uses a small amount of corn syrup as a way of interrupting the crystallization process in goods with a lot of sugar. Might be worth a shot after you remelt it with a bit of extra water.

Yep. Microwave or really hot water bath.

Here's a neat little tidbit I found.
http://www.newton.dep.anl.gov/askasci/gen06/gen06278.htm

"Temperature has a big effect. The bees keep honey from crystallizing by
keeping it warm. The brood in the hive is kept about 93 degrees and they
honey stays liquid at that temperature. (It will reliquify at only slightly
above that temperature.) Honey can also be frozen to stop crystallization.
(Sounds funny, but true.) Honey crystallized best at 40 to 45 degrees.
That is close to the temperature in your refrigerator. Don't store your
honey there unless you want to encourage crystallization.
"

Most of the good honey I have purchased comes with a little label warning about how it might crystallize, and that it can be re-liquefied in a warm water bath with a little patience, and that nuking it is actually detrimental to the quality of the honey. But that might not all apply exactly the same when it comes to sugar. What are you making with it?

If the syrup was still hot when you put it in the tall jar, it may have allowed condensation to occur. The condensed water droplets could have dripped back into the syrup & caused the crystallization. Allow the syrup to cool before putting in tall-sided jars or covering.

We talked about this in my food science class. It crystalized because the syrup is too saturated of a solution; when it cooled, the crystals could no longer stay dissolved. Even if you let it cool all the way before putting it in the jar it still would have cooled because the slightest agitation will cause crystal formation.

It's still perfectly good. As others have suggested, warm it in a microwave or hot water bath (preferable).

To prevent crystalization in the future either add more water so it's not a super saturated solution, or add fructose (corn syrup). Fructose really doesn't like to crystalize, and the molecules get in the way of the sucrose so they can't link up and crystalize. A small amount, like a tablespoon, will do.

once sugar is in its crystalline state, the only thing it can be used for is caramel sauce (the kind with heavy cream).