I used the nibs. I added them at flameout in the BK with the chocolate, then filtered them out in to the fermenter. The stout (tasted at bottling time) has a really pleasant chocolate/coffee flavor. I was wondering if the high temp at flameout helped extract flavor from the nibs... I fought the urge to add them early, and decided to trust the recipe.
I cold brewed the same amount of coffee grounds and cold brewed them in a french press. I ground them at the grocery store on the coarse setting, intended for french presses. For the cold brewing, I had the grounds in with the water for about 5 hours before pressing them out, and pouring out the concentrate. I'm not sure the exact amount of water I used, but it shouldn't really matter. I would guess about 2-3 cups of water each time I cold brewed. If you don't have a french press you could probably get away with putting the grounds with cold water in a bowl, then pour it through a cone-type coffee filter... I've also heard of people just hot brewing it in the coffee maker, though you might need to use a little more coffee grounds since you'll extract a little less flavor.
My 2 cents.