There are four basic methods of consuming
hashish; three involve
smoking it, and one involves
eating it.
Of the basic methods of smoking hash, two keep the hash "pure" and one doesn't. The first method is to simply crumble the hash into a pipe-like container and smoke it. I say "pipe-like" because one can use everything from a squashed soda can with tiny holes punched in the side to a artfully-carved apple as a pipe. You would be (maybe you wouldn't) surprised how many ways there are to make a smoking container when you don't have a proper one to smoke a fortuitously-acquired lump of hash. To flake hash, simply heat it, and pinch off flakes of hash. (The cheaper the hash, the grainier the flakes will be.)
The second method involves taking a small piece of hash (about the size of a bullet-shaped LED without the leads), and setting it afire until its edges glow, then blowing it out and inhaling the smoke that comes off of it. You need something to hold the nugget, preferably a needle, something to hold the needle, like a beer coaster or stiff piece of cardboard, and a glass or cup to catch the smoke. (A glass is best, so you can see the nugget and know when the glass is full of smoke.) You stick the needle through the cardboard, place the nugget on the tip of the needle securely, and once you've got it glowing (this takes practice, so it's best to let someone with experience handle this) cover it with the glass. Once the glass is full of smoke, tilt the glass just enough to suck the smoke out. Repeat. This is often called "smoking a glass". A variation of this is "hot-knifing" where a hot knife or other metal implement is used to heat teh hash and make it smoke.
The third involves mixing flaked or crumbled hash into tobacco (or if you're hard-core, marijuana) and rolling it as a cigarette. The infamous "spliff" is made using this method. This method is very popular in Europe as many people smoke "roll your own" cigarettes normally, and so someone almost always has rolling papers and tobacco.
To eat it, find a recipe that uses a lot of butter or oil. Before using the butter or oil, heat it in a saucepan (be careful not to get it too hot) and crumble the hash into it. THC is fat-soluble, and the (Low, but not too low, just a simmer!) heat releases it into the oil. Then use the oil or butter in the recipe as intended. This is why fat-rich foods like brownies are so popular (and they taste really good.) This method also works with marijuana.
This is not advocating the use of hash, btw.