Forget the chips, make the sticks as they dont make a mess in your carboy. If you really want chips though just make some cuts vertically and then go over them horizontally and then finish up with a chisel depth wise. It will take much more time and oak your wine faster with more surface area but its harder to separate your wine from it cleanly without having to rack off it. With then sticks all you do is yank them out.
If you have carboys and you don't mind your wine sitting in them potentially for months and months, I agree with Wade, sticks or larger chunks (1/8" thick) are the way to go. Another advantage is that you don't risk over-oaking your wine so easily because it picks up the oak flavor slowly over months rather than a couple weeks with small chips or shavings. Just taste the wine every two weeks, and pull out the sticks just when it's oaked a bit too much for your taste. You'll find that the oak will tame in the bottle, and many people who remove the sticks when it's "just right" wish they had left it on the oak longer.
I'd stay away from black and live oak, and only use the white oak. Do not use the fresh sap wood. Wood contains a lot of volatile compounds that you don't want in your wine, so you must let the wood dry out in open air after making your sticks. Some people like to see it aged for a year! Definitely avoid anything even remotely close to green wood. Once it's completely dry and aged for at least awhile, you'll want to toast it. Do this with your chips or sticks spread on a cookie sheet in your oven set to a fairly high temp (375 to 425 would work). Heat it until it just smokes a bit, and the wood facing the top begins to brown noticeably. This is "light toast". Keep it longer until some charred bits start to appear if you like a medium toast. This might take some experimentation on your part to see what toast levels you prefer.
Edit: Oh, for making the sticks themselves you can simply use a trusty hatchet. Don't hurt yourself!