Chaga is an awesome medicinal fungi which grows on birch trees in the northern hemisphere! It is said to both cure colds as well as having cancer healing properties. Here's what Wikipedia says:
Inonotus obliquus, commonly known as chaga mushroom (a Latinisation of the Russian term 'ÃÂÃÂ°ÃÂ³ÃÂ°'), is a fungus in Hymenochaetaceae family. It is parasitic on birch and other trees. The sterile conk is irregularly formed and has the appearance of burnt charcoal. It is not the fruiting body of the fungus, but a mass of mycelium, mostly black due to the presence of massive amounts of melanin. The fertile fruiting body can be found very rarely as a resupinate (crustose) fungus on or near the clinker, usually appearing after the host tree is dead. I. obliquus grows in birch forests of Russia, Korea, Eastern and Northern Europe, northern areas of the United States, in the North Carolina mountains and in Canada. The chaga mushroom is considered a medicinal mushroom in Russian and Eastern European folk medicine.
You can find the whole article here: http://en.m.wikipedia.org/wiki/Inonotus_obliquus
Step 1: Collect!
If you can find a tree with chaga you're in luck! It is said that only one in 700 birches carry the fungus.
The outer black skin is almost as tough as the bark on the tree whilst the actual fungus beneath is soft and fleshy. It is easily removed and gathered with a knife or an axe.