I just bottled a coffee porter. I soaked cracked (but, next time I'll just use very course ground) coffee in enough vodka to cover for an hour, and then added to a carboy and racked on top of it. I let it set for 3 weeks, and then bottled. Strong coffee flavor and aroma going into the bottle...but, no bitter bite.
I expect it to mellow out some in the bottle. Actually, I hope it does. Its very "in front" right now. I let it get there, on purpose, with the expectation that it will mellow. If it doesn't, then I will back off next time...as it is quite dominant. Go big, or go home, right?
I used 1.5 oz coffee per gallon. I put the grounds in a mason jar and just covered with vodka. It worked out to an equal weight of vodka...so, its not really enough to skew the ABV by much. The vodka/alcohol will extract some flavors that the beer wouldn't (or that would take much longer due to the lower ABV).
The flavor continued to develop for about two weeks. By the third week I couldn't tell a difference from week 2. I roused the grounds once per week...probably not enough to make a difference, but I was "afraid" of oxidizing by doing it more than that. In the end the flavor was what I wanted, so I won't bother next time.
I suppose course ground would probably extract a little quicker. I cracked it pretty fine with a mallet, but still not as fine (or uniform) as a course ground. So, I'd want to taste a little more often to be sure I didn't get something I didn't want. I'd probably taste every other day until I was confident in the rate of development.
The grounds floated on top of the carboy for the first several days, then began to settle to the bottom over the next week or so. By the end of the 3 weeks, 90% were on the bottom. But, there was still a layer floating on top.
I wouldn't add it to the kettle. Too much risk of extracting the bitter compounds. The ideal brewing temperature of coffee is 190F, with 4 minutes of contact time. Hotter or longer is what gives those nasty, acrid flavors.