First, the why.  Chocolate is an emulsion of chocolate liquor (100% cocoa "liquor" with no cocoa butter in it) and cocoa butter.  Cocoa butter itself is made up of saturated fat (the majority of which is stearic acid and is cholesterol-neutral, monounsaturated fat and polyunsaturated fat.  These different fats have slightly different melting and crystallization temperatures, so tempering is the way that you get all those different fats to behave themselves and crystallize at the same time.  When you buy good quality couverture (professional quality chocolate) at the store or online, it is already tempered.  It is glossy and snaps when you break it.  As soon as you melt the chocolate and it gets above 105 degrees, F, all the cocoa butter crystals melt and just fall apart.  In order for the chocolate to cool to the same sheen and snap, it must be tempered, or the temperature must be manipulated in such a way that the cocoa butter crystals set up in a nice and stable manner, just like they came from the store.  If you don't do this and just let the chocolate cool on its own in its own time, the crystals will be big, dumb and unstable, and your chocolate will dry dull, will melt very quickly in your hands and will bend pitifully instead of snapping when you break it. 

Okay, so what?  When working with tempered chocolate, you can spread it into thin sheets, dip truffles or other candies, paint it on leaves, cut it with cookie cutters, write with it, pipe it into little shapes to use as dessert garnish, spread it and scrape it into chocolate cigarettes and use all manner of cool techniques to build keen chocolate showpieces.  Regular old melted chocolate is great for using in recipes.  Period.

Now, the how.  The basics are to heat the chocolate to no more than 115 degrees, F so that all the fat crystals are melted, then cool the chocolate to introduce stable cocoa butter seed crystals and then bring the temperature up a couple of more degrees and hold it there as long as you are working with it.

It sounds hard, and it is a bit tricky, but get some good chocolate, block off some time and go to it.

There are several ways to temper chocolate.  You could melt it at such a low temperature that it never goes out of temper (about 88-89 degrees, F, for dark chocolate, and 84-86 degrees, F, for milk or white chocolate).  For this, you need a special chocolate tempering machine.  It will cost you a Very Lot.  Let's move on, shall we?

You know what, let me tell you what I think is the easiest way.  If you want to learn about many other ways, please click here.

Here's how I do it:  Have about 1 pound of good dark couverture, either pistoles or chopped fine.  Put about 3/4 of the couverture in a microwave safe bowl.  Microwave on medium at intervals of 45 seconds or so, stopping to stir, until chocolate is warm to the touch (drip some on the backs of your knuckles) and completely melted.  The temperature should be no higher than 115 degrees, F.  Now, stir in some of your unmelted chocolate (remember, it's still in temper, so it will provide those stable fat seed crystals that we need so the rest of the cocoa butter will fall in line).  You can use an immersion blender to do this, as well, but do not incorporate any air.  Continue stirring in your seed chocolate until the temperature of the melted chocolate is about 81 degrees.  It will feel cool across the backs of your knuckles or when touched to your bottom lip.  Take its temperature to check yourself.  After you've done this a few times, you won't need the thermometer.  Place back in the microwave and heat on medium power for a few seconds, stopping to stir, until the chocolate is at 88-90 degrees, F.  Hold it at this temperature while working with it, by periodically putting it back in the microwave for a few seconds.

You can test to see if your chocolate is in temper by spreading a little bit really thinly onto parchment set on a cool surface (marble, cookie sheet, etc)  It should set up quickly and have a nice sheen to it.  It should peel cleanly off the parchment and snap when you break it.  If it is streaky, you need to cool it a little more, so keep stirring.  Check for temper fairly often, checking yourself with your thermometer as you are learning.

Here's another way I've tempered dark chocolate.  It works well, but you have to be careful because it uses a water bath and an ice bath, and you don't want any water getting in your chocolate lest it seize.  At any rate, melt the dark chocolate over a water bath to no higher than 115 degrees, F.  Once it's all melted, put your bowl of warm chocolate in an ice bath.  Stir madly.  You will feel the chocolate that is touching the bowl start to firm up.  Remove from the ice and stir until all the cooled chocolate is mixed in.  Continue putting your bowl in the ice, stirring and then taking it out and stirring until the chocolate is at 81 degrees, F.  Briefly put the bowl back over the water bath and stir and heat until the chocolate is at a working temperature of about 88-90 degrees, F.
  
For a more in-depth look at working with tempered chocolate, please visit these sites:

Chocolate Decorations--Jacques Torres
Chocolate Work
Jacques Torres Dessert Circus  
Sweet Sculptures

*Many countries that produce and export chocolate rely on slave labor--Blood Chocolate, like Blood Diamonds.  Buy chocolate that is responsibly produced.  Click the following links for more information.

Stop Chocolate Slavery
Anti-Slavery