It's recommended to only use lump in an egg, less ash and less nasties creeping into the ceramic.
You can bury a couple chunks in the coals if you want, it really doesn't matter. I prefer to throw them on top. I throw 2 lighter cubes on top, when they are burnt out I place a chunk on each lit spot. 30 minutes later or so once you get thin blue smoke your good to go.
You will find many folks who bury the chunks though.