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There have been a few good dialogs recently about smoke and the BGE-here's an attempt to capture a bit of that knowledge in one post:
I will start with an post that I poached from Stike a while ago that is a good primer:
Posted by Stike-<?xml:namespace prefix = o ns = "urn:schemas-microsoft-com:office:office" />
“frankly, wood is wood. i use chips, chunks, barked, no bark, etc.
chips and chunks don't do anything better than the other, unless you use one like you'd use the other. meaning, use chips like chips and chunks like chunks. people win contests with either, so it doesn't affect the food. you just gotta use them "corrrectly". In the BGE chips can be mixed throughout the lump to maximize smoke during a lo and slo. your fire crawls around, so you want chips where the fire will be. you won't use up all the chips because the fire won't use up all the lump. don't screw with wet chips. in a ggasser, you wet chips to keep them from burning outright, and flaming. they can't do that in the egg. you can have a raging fire, and toss in wood, and it WILL NOT CATCH FIRE as long as the lid is shut and the airflow is dialed in. open the lid, and the wood WILL burst in to flame. shut it, and it goes out. it WILL smoke though. and that's what you want.
chunks are fine too. you strategically put them around the lump, and maybe push one into your fire right at the start, just to make sure.
put in as many chips/chunks as you want. smoke flavor is added as long as there is smoke. that means, if you had a butt going 20 hours, and the smoke only showed up for the last hour, it'll still smell like (and taste like) smoke. it's the smoke RING that only forms in the first hour or so. and the smoke ring is color, not flavor. so don't worry about when smoke kicks in. if you like a lot, add a lot of chips or chunks.
chunks vs. chips is the same as "ford vs. chevy". much ado about nothing.
Now from personal experience-I like chips for the low&slows as I load them all throughout the lump when filling the fire box and up into the ring for the cook. I generally equate (no scientific proof) a healthy handful of chips to a chunk of wood to guesstimate the amount of wood added. I find that a good amount of chips throughout the lump provides a steady source of smoke for as long as the fire is burning. So, if you want sustained smoke I would go with the chips and for concentrated smoke, go with the chunks. For everything else-go and enjoy the journey. Related, I always start the fire in one spot somewhere around bottom dead-center and go from there. Ramblings on a cold Saturday afternoon, 7 hours into a 6# pork shoulder smoke.