Friend of mine used dried birds-eye chili and crushed them. Came out rather well too ... it had an 'after-burn' No idea how much he used though! Far easier than using fresh ones, he threw it in about 5 mins from the end of the boil. If you are sold on using fresh ones, try slicing a few (or a load) and dropping them in boiling water. Remove from the heat, cover and allow to soak for about 30 mins. Then strain and add to the boil just before the end.
I'm sure I read somewhere about why its best to add the chili into the secondary fermenter, nothing to do with taste but something about the yeast not liking it... but damned if I can find it. Like I said, I know someone who made it successfully by adding to the boil.