To prepare your mise en place, first prepare the tamarind pulp. If needed, review this
"What is Tamarind" video, to see how to prepare the pulp.
Next, in a food processor, add the shallots, garlic, ginger, lemongrass and Thai chilies and blend until you reach a somewhat smooth paste. Remove the aromatic mixture from the food processor and set aside.
*Note: For the Thai chilies, you can use either dried or fresh chilies. The fresh chilies will just give you a brighter red color peanut sauce, like the one pictured in this recipe.
Once the aromatic mixture is removed, in the food processor, add half of the peanuts and finely chop. Roughly chop the other half by hand. Place both the finely chopped and roughly chopped peanuts into a bowl and add the tamarind pulp, along with 1 1/2 cups of the warm water.