The heat that peppers impart comes from an alkaloid compound called capsaicin, which is manufactured in the ribs of the chili pepper. The way to really keep the heat down is to remove these spongy inner parts. The seeds usually absorb capsaicin from resting near the ribs, so it's best to remove those, too.

Capsaicin itself doesn't have any flavor; it stimulates the pain receptors in your mouth rather than your taste buds.

Exploratorium SF Dinner Party Fix-Its