Treasure Chests are hidden throughout each stage. They may be revealed by either passing a specific (but unmarked) point on the screen or using the magic associated with the crossbow. For the former, the vast majority of trigger points are reached by double jumping. It is therefore advisable to double jump around a lot when you find yourself in need of a Treasure Chest.
Once revealed, Treasure Chests may be hit with your weapons to break them open and reveal one of the following:
Provided you do not lose your armor, the order in which items are revealed is:
Any further Treasure Chests will reveal either weapons or evil jesters.