Tempering is necessary when using larger amounts of chocolate (1/3 pound and more) to mold, coat or dip confections with or when making chocolate decorations, such as sculpted ones or ribbons. 

Although our intuition is to melt the chocolate and use as, just melting it for these types of recipes won't work, even though it tastes just as good. Tempering is done so the chocolate will harden with desirable attributes by stabilizing the cocoa butter (fat) crystals found in it. Simply melting chocolate is perfect when making a recipe, small chocolate items with a few ounces of chocolate or those with chocolate chips. 

Temperature plays an important role in the chocolate tempering process. It is done by first melting "pure" chocolate, cooling it and then reheating slightly at precise temperatures to achieve the desired crystal structure in the finished, solidified product. All temperatures are measured with a Mercury-Gauge Chocolate Thermometer because it measures in 1 degree increments, extremely important when tempering. 

If you simply melt chocolate, pour it into a mold, and let it cool, the resulting solid will be inferior to tempered chocolate in three major ways:  

Appearance. Tempered chocolate releases easily from a mold and keeps at room temperature for months without discoloring or becoming streaky. Have you ever had the experience of opening a bar of chocolate found in a cabinet that was stored far too long, and finding a grayish, powdery surface on the chocolate? This is called "bloom". It doesn't actually affect the taste of the chocolate at all, but it doesn't look nice. Untempered chocolate used for confections and molding, develops serious bloom in 24 to 48 hours, and it never gets the beautiful shine of tempered chocolate.

Solidity. Well-tempered chocolate sets hard, snaps crisply when broken, gets a lustrous sheen, feels dry to the touch and smooth in the mouth. Untempered chocolate never develops the hardness or "snap" that one expects from a piece of chocolate. It can be very messy to serve in warm conditions.

Mouthfeel. Tempered chocolate melts at a specific temperature (1-2 degrees below normal body temperature) for a perfect mouthfeel. This is very important. The texture of bulk untempered chocolate is highly unpleasant and the flavor doesn't develop properly in your mouth. It's just not right.

When you buy commercially available pure chocolate, it has already been tempered by the processor as the final step when transforming cocoa beans into high quality chocolate. You can tell it has been done by looking at and tapping your chocolate bar -- it should be shiny, sound hollow when tapped, does not break easily when you try and take a piece from it and has all of the attributes of well-tempered chocolate previously described above.  

When you melt chocolate for your own use, you in effect break the temper from the processor and its crystals separate into four types: beta, gamma, alpha and beta prime. 

The beta or good crystals are lost somewhere in the molten chocolate and and when it cools, the last three crystals contribute to a chocolate that won't fully harden and will have a streaked and dull sheen, called a "bloom". However, the densest and most stable form hardened chocolate (cocoa butter) can take is called the beta form, achieved only through tempering.

Tempering ensures that the beta crystals in the chocolate are not lost when melted and that it will harden back with its original crystalline pattern, all with a uniform size, resulting in all of the desirable traits of good chocolate confections and decorations can have. Beta crystals are composed of triglyceride molecules interlocked in a way that makes them most resistant to melting (they have a melting point of about 95 or 96 degrees F and most resistant to physical distortion (this is the reason the chocolate snaps rather than bends and doesn't set when cooled). The percentage of triglyceride molecules that are in the beta crystal form (seed crystals) determines how thick the chocolate is (and, hence, how it flows), how it cools, and how it will eventually appear. Too few crystals and the chocolate won’t harden or contract properly; this is called under-tempered chocolate. Too many crystals and it may be too thick for enrobing and dull in appearance; this is over-tempered chocolate. 

During this process it is important to stir the chocolate in just the right way; adequate stirring encourages the formation of lots of small beta or good crystals with too little stirring will prevent the right crystals from forming. 

To see if you have properly tempered your chocolate, a quick test is to dip a spoon into the melted chocolate. It should coat the back of a spoon with an even layer and then harden into a shiny shell. If not, the chocolate will remain soft and dull. 

The key to success when dipping chocolates at home is to temper the chocolate and then keep it at the optimum temperature while coating your centers or molding. But, if the chocolate you have tempered goes "out of temper" or hardens, cools below or is heated above its "temperate zone", it can't be used unless it is "tempered" again. NOTE: If you have added cream, butter or any other ingredient to the melted, pure chocolate, it can't be tempered again. Instead its perfect to use for baking recipes and small chocolates.

There are several general rules to follow before you start with any tempering method:

Before starting, make sure you have the time to pay undivided attention during the whole process. 

Chocolate is as temperamental as it is wonderful, and must be watched and handled very carefully. Because chocolate is so delicate to work with, many cooks often find they have a problem melting or tempering it properly. Temperatures that are too high can scorch it, temperatures too low can cause it to harden unevenly after melting. The key to successfully melting or tempering chocolate is to melt it in a double boiler or indirect, very low heat, while gently stirring. And, being careful that no beads of moisture are allowed to mingle with the chocolate or it will clump up called seizing. 

Milk and white chocolate are especially sensitive to heat, more than dark. White chocolate is the most delicate to work with. The milk solids easily lump up in the melted chocolate mixture if exposed to too much heat. Most think the lumps are unmelted chocolate, and turn up the heat, which causes further problems.

When tempering chocolate, be very careful to stay within the "temperature zones". If at any time the chocolate is heated beyond them, the types of crystals you need to hold its temper will melt too. In addition, chocolate will burn or a gray "bloom" or white streaks will appear on the outside when cooled. It is still edible, however. 

Be sure no liquid gets into the chocolate as this will cause clumping or seizing.

When chocolate is in a molten state, work quickly to use it. Properly tempered chocolate will cool at room temperature and start to set up in 5 minutes, and if placed in the fridge will turn hard in 5 minutes.

Classic Method: Traditionally, chocolate is tempered by pouring some of it on a cool marble slab and worked into a "mush" as it cools, but now it can be done on a granite or  stainless steel countertop, as well. It results in the most glossy, crisp chocolate that will set with the most reliability and is recommended for the most demanding chocolate work. Before using, make sure the countertop's surface is a cold, clean and dry. If necessary, cool it by wiping with cold water and then dry it thoroughly, as tiny beads of water left on surface will cause the chocolate to seize.  

1. To temper, melt all of the chocolate in a large heat-proof glass bowl (Tempering Step #1) or microwave 1 pound at half power for 30 seconds. Check the temperature of the chocolate; it should be between 115 to 120 degrees F. Pour 2/3s on a cold table or marble surface. (Keep the other 1/3 at about 100 degrees F; do not let it harden). 
2. Using a pastry or bench scraper and angled spatula, spread the chocolate. Then move it to the center, clean the scraper with the spatula and spread continuously. Continue this spreading and scraping process until the chocolate cools to 80 to 82 degrees F, for all types, which is a lower temperature than quick-tempering (Tempering Step#2). It will lose its shine and form a thick paste with a dull matte finish. Work quickly so that the chocolate does not lump. This process can take anywhere from 2 to 10 minutes, depending on the amount of chocolate, the type and brand as well as the temperature of the kitchen. The professional term for this is "mush."
3. Add the "mush" from the previous step, to the remaining 1/3 melted chocolate. Using a clean, dry rubber spatula, stir the chocolate gently, until smooth. Be careful not to create air bubbles as you do. Return the mixture to heat, stirring constantly until the desired temperature is reached (Tempering Step#3). For dark chocolate it should register between 88 to 91 degrees F for dark. For milk and white chocolates, it should register between 86 to 87 degrees F. Check temper before using (Tempering Step #4).
4. As you work, regularly stir the chocolate and check its temperature to keep it "in temper" (Tempering Step#5).

By Microwave: Use when making small decorative shapes, only. Be careful, as chocolate burns easily and microwaves heat quickly. Microwave until the temperature of the chocolate reaches between 115 to 120 degrees F. Go to Tempering, Step #2.

The amount of time it takes to microwave-melt chocolate depends upon:

1. Wattage of the oven
2. Amount of cocoa butter in the chocolate
3. Amount of chocolate and size of the pieces
4. Size of the vessel containing the chocolate

In a 700-watt oven using large chunks of chocolate, use this chart for the amounts and approximate melt times. For best results, stir chocolate every 30 seconds because chocolate, especially white chocolate, will often retain its shape and will not look melted until stirred.

Note: Cut time in half if chocolate is grated, chips or ground in a processor. Decrease time by 1/3 if oven is convection-microwave.

By Tempering Machine: Takes care of the tempering process in just 25 to 30 minutes and keeps the chocolate in temper. It tends to be expensive.

Chocolate is made up from crystals. What are they? Cocoa butter molecules link together in several different crystalline forms given the names of Greek letters—beta, gamma, alpha and beta prime. ( Beta and beta prime are both called beta crystals). The most basic differences among the them are are melting point, density, and stability. 

Crystals are molecules linked together in three dimensions. The temperature below which a liquid becomes solid through crystal formation is called its freezing point. For example, ice is the crystalline form that molecules of water take when they freeze or solidify. Even though the word "freezing" is normally associated with the idea of coldness, it is clear that there are many substances (like chocolate) that are solid (or "frozen") at room temperature and whose freezing point is actually fairly warm. Conversely, crystals dissolve (that is, they melt) when subjected to temperatures above this point. In the case of water, the freezing (or melting) point is a single temperature—32 degrees F (0 degrees C)—because water consists of a single type of molecule. Cocoa butter crystals, however, being made up of a variety of triglyceride molecules, freeze and melt over a range of temperatures determined by the individual melting and freezing points of the specific molecules present.

How does crystal formation transform a liquid into a solid? As more and more crystals are packed into a limited space a liquid will gradually solidify. Crystal growth occurs either by an increase in the number of individual crystals or by an increase in the size of individual crystals. Small, evenly distributed crystals of similar size create a solid with uniform density, while a combination of large and small crystals creates a solid of variable density. The more tightly packed the crystals within a limited space become the denser or harder the solid becomes.

What does stability mean in the world of crystals? In the simplest terms, stability means that a crystal (or a solid made from crystals) is unlikely to change once it takes a particular form or shape. Another way of thinking of stability is that more energy (e.g., heat or physical force) is required to disrupt the shape of more stable crystals. Imagine that triglyceride molecules—the building blocks of crystals—are chairs designed to stack. If the chairs are placed one on top of another, the space between the chairs is reduced to the minimum—a measure of density—and the stack itself is virtually impossible to disrupt by pushing and pulling—that is, they are stable. If, on the other hand, the chairs are randomly thrown together, there will be large spaces between the chairs and much less force will disrupt the pile. To complete the analogy, the most desirable cocoa butter crystals are dense and stable.

What are the basic principles of tempering? There are two basic concepts that underlie successful tempering: formation or addition of the correct seed crystals and proper cooling and heating to make certain that these crystals are present in ideal numbers. Seed crystals are beta crystals, which, by growing larger, eventually cause the liquid chocolate to solidify. In chocolate that has been heated to the point that the cocoa butter has no crystals present, beta crystals can then be formed by lowering the temperature to no less than about 84 degrees F. It is important to remember that crystal growth requires time. (This step can be by-passed by using previously well-tempered chocolate to provide seed crystal.) Once seed is formed, it is stirred into melted chocolate. Stirring has two essential effects: the equal distribution of seed crystals and the equalization of temperature throughout the mass of chocolate. As stirring continues the chocolate will begin to thicken. It is at this point that small changes in temperature will control the amount of seed present. Slight cooling will cause growth of additional seed crystals. Slight heating will reduce the number of crystals.

Why is the number of seed crystals so important?
It is, of course, impossible to know how many seed crystals are present as you temper chocolate, but The ideal number of seed crystals is probably only about 1% at the time the cooling process begins. Judging when you have reached this point is a function of practice and experience.

some information from scharffenberger.com