Chestnuts aren't so much tough to crack, as tricky to peel. Their shells are much softer and more malleable than other tree nuts, but that means any "cracking" doesn't work all that well. Plus, they have a hairy skin under their peels that clings something awful to the sweet and tender edible chestnut underneath, a fact made worse by the creviced, folded, brain-like texture of the edible part of the nut.
So how to proceed? Cook the chestnuts first, and then keep them warm so that stubborn skin doesn't re-cling to the nut as it cools.
There are two main ways to prepare chestnuts so their shells and icky hairy skins come off with the minimal of fuss: roasting them or steaming them.
In either case, you'll need to cut an "x" or at least a "y" into the chestnut shell. This will let the shell loosen itself from the nut as it cooks.
How to Roast Chestnuts to Peel Them
Preheat an oven to 400F. While the oven heats, cut the "x's" in the chestnut shells. Set the prepared chestnuts in a roasting pan or on a baking sheet, and cook them until the shells pull apart and the nuts are tender, about 30 minutes.
How to Steam Chestnuts to Peel Them
Bring an inch or so of water in a large saucepan, set the prepared (shells cut) chestnuts in a steamer basket, and put the steamer basket over the boiling water. Cover the pot and steam the chestnuts until the shells pull apart and the nuts inside are tender to the bite (or to a toothpick stuck in their centers), about 20 minutes.
How to Peel Roasted or Steamed Chestnuts
However you've cooked them, you'll proceed the same way now. Wrap the roasted or steamed chestnuts in a clean kitchen towel to keep them warm—it will make the easier to peel. As soon as they are cool enough to handle, grab a seat and get to peeling.
Pull and snap off the shells, being sure to also take off the skin between the shell and the chestnut.
When you're done, you want a pile of yellowish-white chestnuts (and another of the dark shells and papery skins).
It's a fine line between the chestnuts being too hot to handle long enough to peel them, and cooling off so much that the skins seem to shrink onto the nuts again. That's why wrapping them in a towel is key. If they cool off too much, that is, if you find that they become trickier to peel as you go, you can pop them back in the oven or the steamer for a few minutes to re-warm them. You can also microwave them for a minute or two for a similar effect, but I find microwaved chestnuts tend to lose some of their tender texture and harden unpleasantly.
How to Use Peeled Chestnuts
My favorite way to eat them is simply as I peel them! It's a fun group activity to sit and peel chestnuts after dinner, treating them as a casual dessert.