The exercise is hard because they require the use of a large amount of muscle to move a major amount of weight over a large range of motion.
Not only do they use a large amount of muscle mass, they require that you not carry excess bodyfat, they are psychologically the hardest.
Muscles worked: Latissimus dorsi (lats), teres major, traps (III and IV), deltoids (especially rear head), pec minor, long head of triceps, the elbow flexors (biceps, brachialis), forearms, abdominal muscles, and the muscles used in gripping.
Grip Variation
Chin-ups:
Use a supinated grip (palms facing you). This grip allows you to work the lats through the greatest range of motion of all the variants. Most people can use the most weight, or get the most repetitions, using this grip. Do not try to use this grip on a bar which slants downwards towards the ends, or you will ruin your elbows.
To find your best grip width, and the top (fully contracted) position of this variant, supinate and clench your hands, pull your shoulder blades back and down, and pull your elbows down.
Your upper arms should be just past parallel to your torso, i.e., if you could drop vertical lines through the centers of your shoulders, your elbows should be slightly behind that line.
Your fists will probably be at shoulder height, or even a little bit below.
They will probably be at around shoulder width apart.
That is your top position.
Any repetition which is stopped short of this position doesn't count -getting your chin over the bar for a second doesn't count.
If you touch your chest to the bar you will know the rep is complete.
Pull-ups:
Use a pronated grip (palms facing away from you). This grip will work the teres major harder, which is why people will "feel" their back more.
The teres major is small relative to the lats, so for most people this variation will not be as good for overall gains in mass and strength, but it is still a useful variant.
To find your best grip width, and the top (fully contracted) position of this variant, pronate and clench your hands, pull your shoulder blades back and down, and pull your elbows down.
Your upper arms should be just past parallel to your torso, i.e., if you could drop vertical lines through the centers of your shoulders, your elbows should be slightly behind that line. Your fists will probably be at or slightly above shoulder height. To set the width correctly, your forearms should be vertical at this point when viewed from the front; you can check this out using a mirror.
That is your top position.
Any repetition which is stopped short of this position doesn't count.
Parallel-grip Chin-ups:
The best way to set up for these is to not use a parallel grip handle such as is used for cable rows and pulldowns.
These have too narrow a grip spacing, which will make it hard for you to get a good full contraction.
Instead, set yourself up with two free handles that you can set to your personal width preference.