The annatto seed is the small, flinty little seed of a shrub with grows in the tropical parts of Latin America. Because of the seed's deep red colour it is often used as a food colouring - it is the colour used to make margarine yellow as well as being used to colour Gloucester cheese.
The seeds are sometimes heated in oil to release their orange colour, and used in much the same way as saffron, however I have never done this.... I imagine seeing as how annatto stains everything it touches I would inevitably destroy a shirt if I even tried.
In Mexican cuisine the seed is ground to a paste with other spices to make achiote paste, which can be used as a rub or marinade, and as the seasoning in the famous cochinita pibil.
It's difficult to describe the taste of achiote, the word "earthy" is used a lot, and that definitely true. It's distinctive but not in any way unpleasant, in fact it's quite comforting and slightly rustic. There is something elemental about the taste - it is of itself and not something assembled from already familiar tastes.
It is possible, using a blender, to make an achiote marinade using anatto seeds, though it is more common to buy the achiote as a block of a thick paste and then to loosen this with (normally) citrus juice. Making the paste yourself would require a spice mill to grind the exceedingly hard seeds and it's not something that can be done in the home.
Achiote Marinade2 cups of liquid - use a combination orange juice, lime juice, apple cider vinegar.
5 tbs anatto seeds
2 tbs of salt
2 tsp of cumin
2 tsp of pepper
1 tsp of oregano
5 allspice berries
5 whole cloves
5 cloves of garlic
Chile (if desired, use habanero or piquin)
Simply blend everything in the blender until the anatto seeds have been pulverised. This could take a couple of minutes of blending but it's important to take enough time to do this properly or you'll be left with anatto grit in the marinade.
A far easier method is to skip messing around with anatto seeds altogether and simply use one of the packaged pastes which can be bought in the supermarket. The paste is simply bought to the desired consistency by mixing with liquid. Normally citrus but a light vinegar or even water can be used. These pastes will generally produce a smoother achiote and can also produce a thick rub which would be impossible to do in a blender from the seeds themselves.
Cochinita Pibil - Pork, marinaded in achiote, roasted in banana leaf. Traditionally this dish would be prepared in a pit barbecue, if you have one available.
Pollo Pibil - Like cochinita pibil but using chicken. You can also steam the chicken wrapped in the banana leaf rather than cooking in the oven.
Huachinango Tikin Xik - Red Snapper, butterflied, marinaded in achiote and grilled.
The achiote can be used, with a little liquid, as a thick paste to smear on meat or fish before roasting or grilling or, with more liquid, as a marinade. It works well with grilled salmon or over a roast chicken.
I'll cover the pibil and the huachinango dishes in more detail at some further date, though I couldn't mention cochinita pibil without pointing you towards this mini masterpiece from Robert Rodriugez