The islands are the only areas where Palm trees can be found. The islands comprise the "Sand" material, their coloration appears to be a pale, yellow color. Each island is connected to the Ocean floor. There are a total of three Sand Islands in the game; two are located near the Safari and a third can be seen off the coast of the Main Biome.
These islands cannot be accessed by any intended method. Illegitamate methods such as Doorbridging, attaching a car to the avatar, or flying with Tobbogan can get you there as it has been proven successful by many players. The only legitamate way to get there would to be drag giant trees into the ocean, but this has been proven unsuccessful many times. As mentioned by Defaultio himself, the islands are only intended to exist as a tease to the players. It is unknown if there will be any normal ways to get to the islands in any future update.