The Scheme command is used to generate mutual induction principals.
This excellent Coq-club post by Xavier Leroy explains best practices for mutual induction in Coq.
A response by Matthieu Sozeau to that post explains the use of Combined Scheme, which is available in newer versions of Coq and addresses Leroy's critiques.
See also the Coq Reference Manual's discussion and examples.
Section 14.3.3 of Coq'Art contains information on how to do mutual induction on inductive types which are NOT defined mutually (ie using "with"). This is important for polymorphic datatypes: for example, an inductive type with a constructor taking an argument which is the instantiation of the polymorphic list type at the inductive type being defined. You can find this information on google books
HugoHerbelin has posted some additional information about how "nested fix" works here http://article.gmane.org/gmane.science.mathematics.logic.coq.club/5280 see also http://article.gmane.org/gmane.science.mathematics.logic.coq.club/4125/match=more+nested+fixpoint+difficulties and http://article.gmane.org/gmane.science.mathematics.logic.coq.club/4144/match=generaling+parameteric+fixpoint+parameters and http://article.gmane.org/gmane.science.mathematics.logic.coq.club/4111/match=meta+theory+induction+over+terms+abstract+variables