From my understanding, a cocoa nib is unprocessed cocoa (correct me if i'm wrong please).
Are cocoa nibs ever used for cooking or baking? My assumption is that they need to be processed in order to be utilized.
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Cocoa nibs are the result of fermenting the seeds from the cocoa fruit (the size of a large grapefruit), and then roasting the whole cocoa beans, and then de-shelling them
The de-shelling process tends to gently crack the contents into large pieces. Unlike other seeds and nuts this is acceptable as the product is going to be finely ground anyway
You can also buy "raw cocoa nibs", which are fermented, de-shelled, but not roasted. These have a different taste, and do not make good chocolate
Roasted or not they taste interesting and are useful as a whole flavour item in salads, baking, drinks etc. They are very high in fat so use with caution. The fat also has a very low melting point, so will make any warm liquid dish look oily
They are not to everyone's taste, unlike chocolate compound :-)
In both these case the beans have been fermented on the ground for a few weeks. Non-fermented cocoa beans are not very nice (I haven't ever had any though). From what I understand they compare to fermented beans like non-pickled olives are too pickled olives :-/
Roasted cocoa bean nibs, and roasted cocoa beans
Non-roasted cocoa bean nibs
Yes, cocoa nibs are simply cocoa beans that have been roasted and hulled to the point where they would be made into actual chocolate, (adding cocoa butter and sugar). You may also see cocoa (nib) powder, this is different to cocoa powder. Cocoa powder is simply cocoa nibs that have been blitzed into a powder. Cocoa powder is just the cocoa solids, meaning all the cocoa butter removed.
It's not a direct substitution, but you can use them in place of chocolate chips for a more grown up pure chocolate flavour without sweetness (although use sparingly as they are some what bitter), I've heard they're great in banana bread. You can use them in macarons even too! Too be honest if you ground them up you could always use them instead of cocoa powder.
Being that they have a no sugar and an earthy character you could use them in a host of savoury dishes as well. As mentioned in the previous answer in marinades, spice rubs, sauces (think mole) and even in jam!
Cocoa nibs on the left and cocoa beans on the right. I won't bother with an image for cocoa powder and cocoa powder as the images are barely distinguishable and colours and hues in cocoa powder and cocoa powder are mainly dependable on the species and how it has been prepared (dutching, etc).