How exactly does someone go about using stones in magick? I have always heard of people using colored stones in magick, but i do not understand the concept. Can someone please explain this to me?
Crystals and tumbled rocks are used in charms, healing pouches and for magic energy. Each crystal has its own healing energies. Crystals in themselves are living things as they grew and may still be growing.
I call them, "Crystalline Entities". For example, a Quartz Crystal can be used as an amplifier to increase the energy of another stone eg, Iron Pyrite which is used to attract money. A good book to read is "The Crystal Bible"
I agree, the crystal bible is an excellent reference book for crystals. There are also a couple different versions out there- from a compressed, 'pocket book' sized one that is more portable to a 350 page 'Webster's dictionary' sized hardcover tome with every rock and mineral you could imagine, and a detailed preface.
In a nutshell, Crystals and minerals are used in magic as both symbols, and also contributors. Like oroboros said already, each mineral has its own qualities and characteristics that can be used along with a spell to fuel the intent, or to add a sense of focus. The idea is to choose a stone whose qualities and nature synergize with the magic you are trying to work.
For example, Blue Kyanite is really effective in aligning energy, clearing energy, and upliftment of energy. So it would be handy to include with a spell or mojo/medicine bag when you are trying to clear and balance yourself, and wanting to foster a more spiritual connection.
Meanwhile something like a Citrine would be useful in aiding with an abundance spell. Apache-tears, jet, onyx, and obsidian are all good to use with defensive magic, breaking negative influence, or otherwise removing excessive or bad energy. And so-on.