I've got a brown ale that can be brewed as everything from a simple extract batch to all grain. I've bourbon oaked it, added smoked malt and done all sort of things with it.
Old Bog Road Brown Ale
Many of us on here have used these in beers quite often. I've used the same bag for years, a little goes a long way. And it's like 8 bucks for a big resealable bag.
Lately I've been steaming them in a small collander for 20 minutes, and then I soak them in a mason jar full of more jack for a week or two, then dump them bourbon and all into the secondary. And at 7 bucks for a huge bag, you get a lot of uses of them.
I got that trick from biermuncher.
I've also been dry toasting them lately. I use one of my cast iron pans, get it hot, and then drop them in the pan and move them around for 5-15 minutes or so. They will darken, and toast up really nice. I've just been going by nose more than anything.
I do that, then steam and then soak in jack.
How to sanitize really is determined by when you want to use them. If you know on brew day you want to oak it in secondary, and are palnning to secondary it after two weeks or a month, then soaking them in a mason jar with jack for 2-4 weeks is perfect. The booze should kill all the critters off.
If I suddenly wake up and decide that I might want to oak some beer I wasn't planning on before. Then I steam them, and while they are hot and the pores are open I drop them in a jar of jack and let them sit for an hour or two to absorb, then drop the whole shebang in.
Another friend of mine goes to his favorite bbq joint that sells their smoking wood by the bag.