Entertaining tai chi page I just stumbled across along with a slightly tongue in cheek definition of "chi" that tickled my fancy. I don't have much more to add other than quoting it directly :-)
Chi means many different things to different people. Sometimes it correlates roughly with energy or force, but the way I hear it used it more often than not means "I don't understand". As such it is a useful word, as it rapidly makes you aware of the gaps in the speaker's knowledge. When I ask someone a question about Tai Chi and they use Chi as an explanation I know not to bother asking them again - they don't understand it themselves.
There is nothing mystical or supernatural about Tai Chi or in it's application as a formidable combat art. However peoples natural inclination to immediately assume such forces are at work when they don't understand how something works rears it's ugly head frequently with Tai Chi. Conversely if they believe supernatural/mystical power is at work then they don't understand what is really going on. This is certainly true for Tai Chi! My personal observation reveals a very close correlation between those who don't understand Tai Chi and those who attribute things to Chi.
The following table illustrates how to interpret statements people make involving Chi.
Chi term What this really means in plain English He used Chi. I don't understand how he did that. I use Chi. I don't understand what I'm doing. Use Chi. I don't know how you should do it. I lift my arms using Chi. I don't understand how my arms lift. I transfer my weight with Chi. I don't understand how my weight changes.
Having said all this it should be noted that to some people the term Chi has no mystical or supernatural interpretations. To them it corresponds to concepts which are consistent with the laws of physics, and does not indicate a lack of understanding. This will usually be quite obvious from the way they use the word. It is when Chi is used to explain physical manifestations but cannot itself be explained physically that you should find a better source of information.