Oats are the seeds of the spindly grass plant which scientists have named Avena sativa. To make steel-cut oats, the oat grains are hulled, steamed and usually roasted—the resulting grains are called oat groats (such a great name!). The groats are then chopped up into two or three pieces with big steel blades. The coarse, chewy final product is thus termed steel-cut oats, coarse-cut oats, porridge oats, pinhead oats, Irish oats, or Scotch oats (these things are all over the British Isles!).
"Oats are only fit to be fed to horses and Scotsmen."—Traditional English Saying
"This is why England has the finest horses, and Scotland the finest men."—Traditional Scottish Rebuttal
Agricultural historians believe that oats were discovered by farmers in Asia (probably China) sometime before the third millennium BCE. This tough grass plant can survive droughts, diseases, and pests that would wipe out almost any other food crop, and it can grow in poor soil unfit for most vegetation. Oats might have well become the favorite grain around the world, but they are tricky to store and very hard to bake into bread. In many places (apart from Scotland, as we have seen) oats were regarded as food fit only for animals and the poorest classes of society.
Modern nutritional science has vindicated this humble grain—oats are an excellent source of important nutrients including iron, vitamin E and fiber. Fiber has been shown to be helpful in reducing cholesterol levels in the bloodstream, which accounts for the boom in oat bran products over the last couple decades. Oats also contain antioxidant compounds known as avenanthramides (unique to oats) which may help to protect the circulatory system from arteriosclerosis. Additionally, oat products contain beta-glucan, which may have properties which can be beneficial to Type 2 diabetics, helping them control their blood sugar level, and may also stimulate immune system to better fight off bacterial infections.
Steel-cut oats may be substituted in recipes where rolled oats would ordinarily be used—from oatmeal to breads, cookies or bars. Steel-cut oats offer a chewier, firmer final product which many people find heartier-tasting. As you might expect, steel-cut oats take longer to cook than the thinner rolled oats, but not as long as the whole oat groats. Cooking times are from around 50% to 100% more than comparable recipes using rolled oats, depending on the coarseness of the cut and the specific recipe.
Some people even believe that the heartier steel-cut oats are healthier than rolled oats, although nutritionists have found them to be equivalent in vitamins, minerals and fiber. Either one is a great addition to a healthy diet.
References:
Cook's Thesaurus: http://www.foodsubs.com/GrainOats.html
Oats and grain by anthropod
World's healthiest foods website at http://www.whfoods.com/genpage.php?tname=foodspice&dbid=54
wikipedia entry under oats