Echinacea, a perennial native of North America, was used extensively by the Native Americans in the treatment of illness and injury. In fact, they used it more than any other plant.
There are nine species of Echinacea in North America. Three of these have medicinal value: Echinacea purpurea, E. angustifolia, and E. pallida. The most commonly used species is E. purpurea, partly due to its ease in cultivation, though the Native Americans most often used angustifolia.
Echinacea is a versatile plant, useful in the treatment of essentially any illness caused by either bacteria or viruses. It is used today as popular cold and flu remedy. In fact, in a study combining it with elderberry, it was been found to be as effective as Tamiflu for influenza, with fewer side effects! 
Echinacea effectively handicaps invading microorganisms. It does this by inhibiting hyaluronidase. Hyaluronidase is the enzyme used by bacteria and viruses to break down cellular structures; without it, the infection cannot spread.
Echinacea also stimulates and strengthens the body’s natural defense system. It does this so well that it has even been used to increase white blood cell counts in cancer patients receiving chemotherapy. 
Echinacea speeds wound healing. It was once used for animal bites and gunshot wounds. Besides preventing infection, it increases the production of compounds needed for tissue repair. Echinacea has mild anti-inflammatory properties as well, and is useful in the treatment of many inflammatory conditions, such as rheumatoid arthritis. Interestingly, it is also beneficial in the treatment of allergies.
The leaves, roots, and flowers of the plant are all used. Though the natives preferred to use the root, most studies have been done on the aerial portion of the plant, using the fresh pressed juice. Echinacea is often prepared as a tea or taken in tincture or capsule form. It can also be used externally as a poultice.
Echinacea is one of my favorite remedies, and the more I learn about it, the more I love it. I have used it for years to treat and prevent cold and flu. It offers quick relief of symptoms, and even the worst illness lasts little more than a few days.
The other day as I was walking at the nature park I was stung by an insect on the arm, three times, and it was quite painful. I used it as an opportunity to try another use for Echinacea- to treat insect bites and stings. I chewed a leaf and applied it as a poultice over the area. I covered it with what I had on hand (If you are curious, I used a plantain leaf, and tied a grape leaf around it). I left it on for 20 minutes or so. Within 5 minutes the pain was lessened, and shortly thereafter the pain was gone completely. However (since it was bound to stop hurting eventually anyway) the most notable effect was some hours later. I have always been sensitive to insect bites and stings, and they tend to itch for days. This time, the area was completely lacking the usual itching, swelling, or redness! In fact, the location of the sting was difficult to discern at all.
Echinacea is not just effective for insect bites and stings; it was also used effectively by the Native Americans for snake bites. This is due to the hyaluronidase inhibition mentioned previously, which prevents spreading of the venom and promotes healing of the tissues. The natives used the plant for toothaches, sore throat and cough, infections, various skin ailments, and even rabies! In fact, they used the plant so widely that it would be difficult to list all of those uses here.
It is unlikely you will ever come into contact with a rabid animal, and you may not ever be bitten by a poisonous snake, but for practical use against cold and flu, I have found Echinacea capsules to be quite effective. One Echinacea capsule typically contains 350-400 mg. In the midst of an illness, I will take four capsules three or four times a day. For preventative purposes, at the first sign of illness, I need only take it once or twice a day to keep symptoms at bay.
Echinacea can also be used to treat ear infections, sinusitis, urinary tract infections, yeast infections, and cold sores.
Range maps for E. angustifolia, E. pallida, and E. purpurea:
Echinacea is meant to be taken on an as-needed basis. It is not meant as a daily supplement for healthy individuals. Overuse may start to negate its benefits and tire the body. If you have a condition which warrants continued use of echinacea, the recommendation is 8 weeks on, one week off.
Echinacea is a well-researched remedy, with a long history of usage, and has been shown to be safe, with little chance of negative side effects. Although Echinacea can be used in the treatment of allergies, it shares a family with ragweed and daisies and can sometimes cause a cross reaction in individuals who have an allergy to these plants. In the event of an allergic reaction, discontinue its use.
Echinacea is contraindicated for use with immunosuppressants.
As a side note, I have been using Echinacea for years with no issues to report. However, I have a suspicion that in the event of a particularly virulent illness, high doses of Echinacea can spike an existing fever. Outside of personal experiences, I have not found much information to confirm this effect but if you are like me (I do not typically use medications to lower fever) it is something to watch out for.