I recently brewed a milk stout (http://www.brewtoad.com/recipes/big-...tout-all-grain
). I did a 10 gallon batch with 2lbs lactose (. I split the batch into 5 gallons with just milk stout, and the other 5 I added chocolate nibs. I haven't worked with the powder, but here is my experience with nibs for this batch. Both batches have been kegged and carbed (the milk stout is chilled, while the chocolate is conditioning still).
I ordered the nibs off of amazon (8oz, see link below). I tasted the nibs when I got them in. I really liked the taste, as in, I could eat them plain. I'm not sure if that is anything significant, but it could have some influence on the type of nib you want to use. I wouldn't use anything that didn't taste good!
I then ground the nibs to almost a powder in my coffee grinder. I dumped it all in a ball mason jar, and then covered in vodka (and shook it up). I let it site for a few days. The result was a solid mass of chocolate that was clumped together. I could actually see some of the oil separated from the ground beans.
I scooped it all out into a fine pantyhose sock and dropped it into the keg (held by floss).
It has been sitting for about a month now at about 65 deg. Here is what I have noticed...
HEAD - There is ZERO impact on head retention. In fact it seems like the opposite. There is a very thick/creamy head. I'm attributing this somewhat to the lactose. The head is also much darker than the milk stout version.
Regarding head retention. I believe the reason that it is not having a significant impact is because the fat is solid, and is not absorbing into the beer. If I had boiled in the nibs, then I think the result could be different. However, I have no fear of nibs impacting my head retention when used in secondary.
TASTE - The chocolate character is very subtle, but definitely noticeable compared to the milk stout. There is some grittiness, but I'm sure that will go away once I chill it. The original milk stout is a little too sweet for my taste. I was actually planning on scaling back the lactose to compensate. HOWEVER, the chocolate version is perfect. There is a much better balance resulting from the bitterness imparted by the nibs.
Hopefully this will help some of you in deciding how to add chocolate. I've read for hours and there is clearly no right way to do it!
BTW, here is the link for the exact nibs that I ordered: