The foundation of coin magic is palming - sleight of hand methods of keeping something in one's palm (or thereabouts) without anyone's knowledge. The classic palm is one of the most useful palms in all of coin magic. It is versatile, useful, and fools even the most discerning audiences (if done well at least).

The downside to the classic palm is that although conceptually it sounds easy, in practice it can be rough going. So see how it works.

Take a look at the palm of your dominant hand. Now touch your pinky finger and thumb together. As you do this the muscles of your hand will form a V-shaped channel - it is within this channel that the coin will rest when the palm is completed. Now take a coin of the larger variety (if you have very small hands an American Gold Dollar coin works, if you have small or normal size hands an American Half Dollar is best, and if you have big hands try an American Silver Dollar (the one with Eisenhower on it)) and place it in the lower center of your palm. Now begin to bring together your pinky and thumb again until you find the muscles have applied enough pressure to the coin to hold it if you turn you hand palm down. You will want to adjust the coin's seating such that it feels comfortable and the hand doesn't outwardly appear cramped. Generally you want to have the "higher" edge of the coin below the line of your hand that comes down from between your index and middle fingers and ends near the middle of the non-thumb edge of your palm.

In general you won't just be placing the coin there anyway you like - usually it will have to be done using the fingers of the same hand. Some sources say to use your middle and ring fingers, but since I have small hands I like my ring and pinky - whichever you choose here is how you do it: with your palm facing you and the coin in place bend whichever pair of fingers you decided on over and into contact with the coin. Now turn your hand over and bring the fingers away from the palm, allowing the coin to come along for the ride. Don't go too far though - you are going to now want to try and replace the coin and then "re-engage the palm." Try practicing this a bit, getting a feel for where and how to best place and release the coin - this is the essence of the classic palm.

Now once you have done this a bit, while you have the coin balanced on your fingers, try twisting you hand so as to have your hand palm-side up (since all the while you should have been practicing with it down - fighting gravity wit your burgeoning palming abilities), keeping the coin balanced on the ends of your pair of fingers. This combined with the previous points form the entirety of the classic palm.

One thing you will notice as you practice is that as you place the coin into the classic palm your thumb will unconsciously jut outward from your hand - sending a signal to those who notice these things that you have just palmed something. If you can swing it try and keep your first finger and thumbtip touching as you place the coin in the palm - it is difficult, but looks more natural than always sticking your thumb out.

From here on out it is all about practice and the illusion of normality. Practice using a pen with a coin palmed, try snapping your fingers, try typing on a keyboard (this is tough), etc. Do whatever needs to be done to make it appear as though the hand is fully functional when palming a coin - it is this illusion of normality that is the true end goal of the classic palm.

Sources:

Bobo, J.B., Modern Coin Magic, Dover Publications, Inc., New York, 1982

Watkins, Dan, The Coin Purse, http://www.zyworld.com/coinpurse/Classicpalm.htm