A chisel is very different to other wood working tools such as saws or files. A saw will cut a block out of a piece of wood while files just smooth and grind things down. Chisels are used to carefully remove just a section from the wood. The cut can be different shapes, sizes and depths.
First is the width - they come in all sorts of different sizes. You can buy a chisel roughly the size of the cut you're planning to make or get a smaller one. Smaller chisels will take longer and show more streaks when you're done (Like using a small paintbrush to paint a large area) though a larger chisel has more room for error.
The butt of the chisel is also an important factor. When you're hammering away, you want a decent sized target and something that's not going to break on you. A steel end will hold up quite well. Something curved also gives you a better target that will disperse force better than a small, flat end.
Overall, you want something that's made sturdy. While you're pounding at it, you want something that can withstand a constant beating. They can be somewhat pricey for the larger ones, but small to medium sizes will be around $8-15. Hardware stores will usually carry chisels, though some arts and woodworking stores may carry small detail ones.
Obviously, don't put your fingers on the end you'll be hammering and don't miss.
Even more dangerous is the chisel end. Make sure you don't have any body parts in front of the direction you're chiseling and never work toward yourself. The bladed end isn't sharp in the traditional sense - you probably won't cut your finger if you slide it along the edge. However, it is a cutting edge and it's built out of thick, solid steel. This will injure you if it's directed towards a body part with some force.
Some brands, like these, (Husky) include a plastic cover for the tip that even snaps over everything, holding on solid with a plastic strap. I had to snap the plastic tab used to hang it in store off, but it's nice to have a safe cover. You're not going to want to drop this on your toe either.
First thing is to mark the area you want to chisel out.You can either use the chisel or use a knife. If you use the chisel, watch the side - you'll want to use the flat edge rather than the beveled one so things are straighter. This outline acts as a guide and helps ensure that only the wood you want to remove will be peeled up. As you get deeper, you may have to make the outline again.
This work applies a lot of force upon the object you're chiseling. Before you start, clamp it to a surface like a table top.
When you're ready to chisel, flip it around so the straight edge is up and the beveled side is down. Start somewhere on the perimeter and move to the other side. If possible, work in the same direction as the grain of the wood.
When you start hammering the end, you can keep the chisel angled up, then as you move away from the edge, tilt the chisel down, making the angle smaller, until the bevel is flush with the surface of the wood. You can also tilt the chisel from side to side, applying more pressure on either corner to dig up uneven surfaces.
You may have wooden burs collect along the edges of the area you're cutting out. If that happens, just use a knife to clean them off.