I noticed one of those hole-like things on my coconut was lifting up like a flap. Under it, I noticed this >> http://i173.photobucket.com/albums/w63/kuhliloach/Zach/DSCN5068.jpg Is this the palm tree sprout?
Yes, the coconut is germinating. The flap is called a germination pore, where the radicle emerges. The radicle will grow downward into the soil, as it's the root. Hope it goes well, I've always wanted to grow one, not the right climate though here.
The photo is pretty blurry and hard to really see detail, but from I can see, it looks like roots near the top? Roots will sprout first and burrow down into the sand for water and nutrients. Once established, a green shoot (the palm) will grow.
I am growing mine in Oregon, which is not at all know for very warm weather. Where do you live? I think it is worth a shot. Should I change the soil to sand? Does sand carry more benefits than potting soil when it comes to coconuts?
In the wild coconut palms live in very fast draining soil mixes that are very sandy. In Florida the soil is close to 50% sandy soil. Coconut palms grow everywhere.