the outer peel is the orange the inner part (called the pith) is the white part... and yes it is bitter (ever tasted some).
I'd recomend zesting and boiling that zest. I know you can buy packets of orange (bitter or sweet) for adding in I think in the 1 oz size. They are dried orange peel bits. I have used them once in a kit that contained them. I'd say that they somehow get the right amount of peal with out getting to much pith.
Anyhow if you are doing it yourself, just zest, or use a small grater to do the zesting - 1 orange is ok to zest, but lots it is handy to have a grater because it is faster.