It is my understanding that you split the vanilla beans lengthwise then "scrap" the inside. I just added two madagascar vanilla beans to my 5gal holiday dubble. I split, scrapped, soaked them in vodka for a couple of days to extract more oils from them, then I poured everything, vodka and beans, into the secondary. Its only been a week but the vanilla flavor is definitely there, but not overpowering.
As far as the nutmeg, I think that is more of a preference thing. I prefer 5 min, but you could do either or both.