Why 1-octanol is immiscible with water?
I just thought I'd add a visualisation of this concept. Electrostatic maps show the electrostatic potential at a given point of the molecule. We know water is very polar, and this is evident from its electrostatic map:



If we look at octanol though, we see that the vast majority of the molecule is non-polar (evenly distributed electrostatic charge):



The hydroxy-group of octanol is indeed hydrophilic (polar), but the majority of the molecule wants to stay in the non-polar phase.

Molecules with strongly hydrophilic "heads" and non-polar tails have unique properties in aqueous solutions, including some very important for life. Take phospholipids. In water, they self assemble into the basic structure of the cell membrane, the so-called phospholipid bilayer:



You can see how the phospholipids arrange themselves to have their polar portion in contact with water (hence "hydrophilic" - "loving water"), while their non-polar portion is in contact only with the non-polar portions of the surrounding phospholipids (hence "hydrophobic" - "fearing water").