We had to get a cast-iron coal grate for the fireplace, then we had to learn to kindle and burn coal correctly. As I recall, we started with paper and kindling to get a hot start, then put smaller coal chips on it that would ignite quickly. Then we would pile larger lumps on, taking care not to smother or overload the fire, until we had built up a good pile of evenly burning coal. That would minimize smoke. You had to arrange things so that blowing on the fire wasn't necessary—blowing on it just spread coal smoke through the house.
Once ignited, coal burns slowly with little flame and high heat, occasionally making gentle ticking sounds. Coal smoke is less aromatic than wood smoke and has a dirtier smell, like cigar smoke compared to a pipe mixture. But like tobacco, it was not unpleasant in small, dilute doses. High-quality anthracite makes almost no smoke at all.
A grate full of burning coal would easily go all night without any attention. We had glass doors on the fireplace to help modulate the draft, which allowed us to burn more slowly at a lower temperature and also greatly reduce the risk of carbon monoxide exposure. Looking around the Web, I can see that we didn't do anything badly wrong. The two main things to be sure of are having a sound chimney that can take the hotter fire and regular chimneysweeping. For my family, burning that old coal was just fun, but with good equipment and careful operation coal can be as good a heating solution as anything else.
Today very few Americans burn coal at home any more, just 143,000 homes in the 2000 census (one-third of them around the Pennsylvania anthracite country). But the industry carries on, and sites like the Anthracite Coal Forum are active and full of ready advice.
Back when everyone used coal, the smoke was surely terrible. The notorious London smog, which used to kill hundreds of people, was based on coal smoke. Even so, in Britain today, where coal launched the Industrial Revolution more than 200 years ago, there is still a constituency for solid fuel heating. Technology has made coal a friendlier home fuel.
Coal is still king in the third world and China. The smoke and pollution from primitive stoves is horrendous, causing death and illness among people who deserve better. Environmental entrepreneurs and inventors (like those profiled in The New Yorker in 2009) are applying their talents to meet the need for simple, reliable clean coal stoves.
PS: Because it burns, coal can also catch fire (this above-ground culm fire was memorialized on a 100-year-old postcard), and an underground coal fire can burn for as long as the coal holds out, killing the land above it with heat, smoke, sulfur gases and carbon dioxide. Coal fires in the United States have been burning for decades; others in China have burned for centuries. China's coal fires destroy over five times more coal than the nation mines, and coal fires in China alone add up to about 3 percent of the whole Earth's fossil-fuel CO2 load.