I had an op on an ingrown toenail in February.
They did it under local anaesthetic which is done by three injections into the toe. One either side and then one in the top where the bone is. That hurt like fek! Of course you couldn't feel a thing afterwards!
They then cut a what I can only describe as a trench either side of the nail, taking about 2-3mm of the nail off in the process. They then scraped the white stuff away from beneath the nail so the nail wouldn't grow back. They can't stitch it so it's just a case of lots of dressing. The doctor decided to do both sides of the nail (even though only one side was ingrown) as a kind of preventative maintenance!
They'll only remove the nail completely if you get another ingrown toenail on the same toe.
I had to go to out-patients daily for about a week to have it cleaned and redressed and I was off work for about 3 weeks (job was mostly outdoors). After about 7 weeks it was fully healed and now several months on it hasn't caused me the slightest problem.
See this link:
http://www.acfas.org/brnailds.html Look for Partial Nail Removal. They didn't peel the skin on mine, just cut the trench!
It was the first time I've had any operation and I found it to be okay, recommended if all else fails!