I posted a brief guide on Alchemy, but how do you get some really screwed up and super powerful effects out of crafting? By breaking the system.
The idea behind it is simple enough. In Morrowind, where Alchemy was the only useful crafting skill, you could make fortify intellect potions that increased your effective Alchemy level, and then make more fortify intellect potions, which would be more powerful, drink them, and repeat. Skyrim's system works similarly, except that it is spread over three skills.
The basics of it are similar enough to Morrowind. You use the skills to enchance the skills, but instead of fortifying the same skill, you fortify both of the other two skills, and then switch to another skill, fortify the other two, switch to the third, fortify the other two, until you reach a point where there's no additional benefit. So, you make potions of fortify smithing and fortify enchanting, then use enchanting to buff two sets of gear that fortify smithing and fortify alchemy, then use smithing to make two sets of gear that fortify enchanting and fortify alchemy.
Simple enough of an exploit, eh?