The Piano is located on the 4th Floor in the Piano room.
What it does
In Normal Mode, it is used to make sound in all four rooms, the vase will then drop a King Key. In Extra mode you need to make the Piano play by itself so shadow people will appear in the chairs, and one of them will give you Red Eyes.
The note on the wall says "YOU NEED NOT PLAY". To have it play, you need to find the Music Sheet and place it on the piano to make it start playing by itself. If Viola plays the piano herself, it will eat and crush her. If you place the Music Sheet on the Piano then play it, it will kill you, while the lid repeatedly raises up and down on her. In Extra Mode, the red haired woman will laugh at Viola being crushed.
The Piano plays the song Op.2 (or "Awakening") and that song as people made their own fanlyrics to, called "Friend"