There are two basic types of peppers: sweet peppers and chiles. Sweet peppers are sometimes called bell peppers because of their shape. Sweet peppers of various colors have similar flavors, though red and yellow varieties tend to be sweeter. Chiles, an important ingredient in many cuisines, are available in various sizes, colors, and levels of heat. Capsaicin is the compound that gives a chile its heat, and it is most potent in the white ribs inside the pepper.
Generally, the hotter chiles are smaller in size. It is imperative to take precautions when handling chiles; wear gloves, wash cutting surfaces and knives, and avoid contact with sensitive tissue such as the eyes. Chiles are available fresh, canned, dried (whole, flaked, and ground), and smoked. Frequently, dried and/or smoked chiles are given a name different than their fresh counterpart (e.g., smoked jalapeños are called chipotles).
When selecting both categories, look for firm, heavy peppers, with tight, glossy skin, without puckering or wrinkling. The flesh should be relatively thick and crisp.