Energy Conversion - Potential Energy to Kinetic Energy In what form and by what way is energy converted when i, say lift a block to a height h above the earth's surface. If the said energy, say 5 Joules, is spent in lifting a block, is the whole of the energy converted into potential energy, as given by the formula, mgh or is part of the energy lost as heat due to the laws of thermodynamics, and another part as work against friction, which is this case would be air resistance. And the last question, where exactly is the energy stored, in the block, and is some part dissipated in the air as heat?
 A: Taking the block to be a closed system I would say that when you lift a block you are injecting a certain amount of energy into the system, say, 5 Joules. At first this energy is in the form of kinetic energy since the block is accelerated from rest. This kinetic energy is gradually transformed into the extra $mgh$ of potential energy needed to lift the block to the final height $h$. I thought of it like throwing a ball from the ground onto a shelf, if that helps. Depending on how idealised your system is then you can start thinking about the losses due to friction (say in your muscles and bones) and drag. Ultimately, yes, thermodynamics is king and there will be losses but they are not a big concern to most applications.
As for where the energy is stored: it is not stored anywhere. This brings you to a much more philosophical question: what is energy? Not really sure about that. I would say that it is just a quantity that describes the motion and "desire" of motion of matter. Not sure if that's the best way of describing it though. I guess it is funny how the most physically tangible thing (matter) and the least physically tangible (energy) are inextricably linked.
A: The energy of a body with respect to its position is called the potential energy, P.E=mgh, where m: is the mass of the body, g: is the acceleration due to gravity this is a very earth specific equation and the general equation with respect to any two-body system would be -(GMm)/r,
where G: is the universal gravitational constant,
M: mass of the first body,
m: is the mass of the second body,
r: is the distance between the two bodies, now, the unit of energy is a joule.
The gravitational field around all bodies causes this energy to be possessed by a body in their field. When you increase an object's height on earth the energy possessed by it would be mgh2 - mgh1,
h2: is the final height,
h1: is the initial height. You work against the existing gravitational field and increase the height of the body thus increasing its energy(potential), so you lose energy in this process for energy has to be conserved for the system. The energy of the body is due to the field and not because of the body.
A: Definition:The change in potential energy of the system is defined as the negative of work done by the internal conservative forces of the system.
This definition itself says that the potential energy isn't defined for any single body. It is defined for a multi particle system.
In your scenario, the gravitational potential energy isn't stored in object but it is stored in object-earth system as a whole.
The work done by your hand in raising the object to a height $h$ doesn't only increases the potential energy of the earth-object system by mgh but it also changes the kinetic energy of the system as well as some work is done against the dissipative forces in the system which may get converted into heat,light,sound etc.
A: 
If the said energy, say 5 Joules, is spent in lifting a block, is the whole of the energy converted into potential energy

No, not whole. Imagine that you achieve work as some kind of engine, and all engines has operational looses. So if you gave to block potential energy $mgh$, then it means that you have spent for it energy $$ E_{cost} = m~g~h~\eta^{-1} $$
Where $\eta$ is your work achievement efficiency, and it is $< 1$, because there's a lot of proceses going on in lifting block - your arms joints generates heat upon movement, your brains will eat some calories too, and etc, etc.

where exactly is the energy stored, in the block

Imagine a pair of balls connected by rubber and separated by distance $d$ :

Now you try to increase this distance $d$ between them. You will soon notice that you can't accumulate bigger potential energy in one of the balls without increasing it in the other too ! This means that system is coupled and potential energy is actually stored not in balls separately, but in rubber band itself. So returning back to your question,- same situation with coupled block-Earth system. Gravitational potential energy is property of link between bodies itself, which is transported between bodies by hypothetical particles gravitons (yet to be discovered).
A: You must supply the energy amount $mgh$, yes. This is then stored as potential energy in the earth-and-box system. Were there no box, then no potential energy would be stored - were there no earth, then same. This energy is not stored in either but in the system that they constitute. Potential energy is an abstract concept of energy being stored within a system because there are restoring forces (in this case gravity) trying to alter the system configuration.
Ideally, no more energy needs to be supplied. But in reality, there are several sources of energy loss to the surroundings. Air resistance only matters significantly at high speeds or if the object has a large drag coefficient or frontal area (if it "catches" the air well).
Instead, the most important source of energy loss might be that within your own body. In order to produce the force that does the lifting, your body internally does a lot of work in expanding and compressing muscle fibres. This work is typically converted into heat and lost as steam or sweat or simply absorbed within the body.
Other than these, I wouldn't think that there are many more sources of energy loss. There are no frictions involved (other than frictions internally within the human body, but that is already accounted for). No need to look into the laws of thermodynamics for this, I'd say.
