Just did a pepper beer. Turned out great. I put in whole serranos (de-stemmed) in 12 and whole jalepenos (de-stemmed) in 12.
The serranos got hotter faster (obviously, they're a hotter pepper), were more consistant (loosely used term, as putting the pepper in the bottle is probably the LEAST consistent way of making a pepper beer), and were easy to fit in the bottle.
With jalepenos, you have to pick through to get smaller ones that will fit in the bottle. They took longer to build up any noticable bite and were inconsistent in terms of amount of heat (again, loosely used term).
I washed the peppers well, and froze them. On bottling day, I dipped them in sanitizer (still frozen), plopped them in the bottle, and filled the bottle.
It took about 4-5 weeks from bottling to get a nice bite to the beer. I like hot stuff, so I didn't think it was too hot, but some of my non-spicy-food-loving friends thought it was liquid fire... so maybe I should have served it earlier for the weaklings.
When it gets the right amount of heat, stick it in the fridge and DRINK IT... it will only get hotter as the beer sucks out the hotness from the pepper.
From the very first bottle opened, a week in the bottle, a noticable "vegetable" pepper taste was there. Not hot...more like a beer soaked bell pepper. Some (probably most.. but I'm weird) people will think it is odd (it is.. really) to have that taste with beer, but I thought it was interesting and good.
I used this as the base recipe (five gallon batch, PM - this beer by itself is excellent, FYI):
2 lbs Rahr 2-row
.5 lbs Carapils
.25 lbs flaked barley
.25 lbs flaked maize
3.15 lbs Pilsen malt extract
1 lb Briess Pilsen dry malt extract
.75 oz Cluster (45 min)
.25 oz Cluster (15 min)
Mash at 152*
I'll be making more "Flamin' Tailpipe" at the beginning of January... goes great with burritos!
All of the info I gave is IMO, so take it for what it's worth.