Here is a further well set out post from Raf (username rwood)
There are always alot of questions about candling. So this thread will tell you how to do it, what to look for etc. People should add anything they think will help answer FAQ's. I have plagerised Mike (Chookyinoz) a bit.
Its easy to candle eggs and you must do it - infertile eggs and eggs that have died during during incubation can become infected and explode. This is because decaying infected material produces gas and therfore pressure. You should remove them. The question is often asked;
'Once I candle them, and see they arent viable, do I have to remove infertile eggs from the incubator?'
The answer is, maybe.
Infertile eggs shouldnt really be a problem. In fact its sometiimes advised to put infertile shop-bought eggs in the incubator to increase thermal mass (particularly in still air incubators). I take mine out, but I have a fan forced incubator, so thermal mass isnt such an issue so much.
However, in eggs collected from the coop, sometimes the emryo dies early, day 1 or 2, or even before its layed (apparently due to being inside the hen for too long as the hens internal temperature is about 41 degrees).
The germinating embryo, however small or old, changes the chemistry of the yolk/white, and causes it to rot (incubators are perfect for breeding bacteria). So sometimes the eggs you think are infertile might be ticking bombs. If you are late in the setting though, I dont think its a problem.
I always crack my eggs (once they fail) so as to check for fertility etc, and I have noticed that some that look infertile at candling and on opening (no blood or germ) are rotten. I beleive this means they were possibly fertile but died early.
Apparently you do get notice i.e. smells and weeping. I have never had this problem though.
Now candling - its not hard - Lots of candlers are available from chicken suppliers but is easy to make your own. Just get one of those large squarish Dolphin torches and a new roll of toilet paper - the type with the hollow carboard tube down the centre.
Place the entire toilet roll over the lens of the torch so that most or the light is blocked except for that shining through the hollow tube. In a darkened room place each egg one at a time over the tube.
You can use tins, like baby formula, with a hole cut in the bottom, you can use torches, lights, almost anything with a bright light and a way to only let light through an egg sized hole.
Dont worry about the eggs losing temperature while you candle as temperature loss in the center of the egg takes about an hour.
Developement - Inside the Egg
Th following link show some great pictures of the development of an embryo inside the eggs at each day of incubation viewto
As you can see from those pictures, there is little point in candling before seven days incubation as its too hard to be accurate.
An infertile egg will appear clear and developing eggs will have veins and darkened masses in them.
Dead eggs also become obvious as their development is not consistent with other developing eggs.
Candleing - Pictures and Movies
Surf around this site and you will see some great movies and pictures of candleing and what you will see. http://lancaster.unl.edu/4h/Embryology/
Same site, but this one is linked straight to the movie page. Awesome. It shows you exactly what I see when i candle, and what you should see too. http://lancaster.unl.edu/4h/Embryology/movie6days.shtml
That one is day 6, but have a look at day 11 and day 16.
This one has some good pics as well. http://lancaster.unl.edu/4h/Embryology/
LATE HATCH CANDLING
It is hard to see much after about day 17. The egg will look dark and there isnt much movement. You may however see the membrane of the air sack move.
If you candle around hatch day, you may see the beak of the chick in the air sack. This is a good sign. Put it back and stop playing with the eggs!!
But seriously, normally I candle at day 23 to check for chicks 'Dead in shell'. You find the air sack is filled with chick (black) and no sign of pipping, normally means dead chick. Listen for chirping, but not a good sign. I will still open the egg to see if it is alive, but almost always its dead, sometimes wrong way up.
This site has some great general info on the incubatio process. http://www.msstate.edu/dept/poultry/avianemb.htm
Hope this helps answer some questions.