To start, I'd like to give a quick disclaimer that most of what I know about this is from extensive searching before I oaked a mead, which I have not yet tried, so it is not really based on experience. However, I will try to keep it to the information that is more universal and less influenced by mead vs. beer and I will try to exclude any information that I may have heard that might have been controversial. Normally I wouldn't answer something I didn't have a little experience on, but I figure a researched answer without experience is better than no answers.
With chips it's important to control the amount of oak that you use because the flavor extraction will be quicker than with cubes. I would start with two oz. based on the numbers I've seen for cubes in mead, but when I did a quick search of oak chips on this forum some people were talking about using four oz. or more. It seems to me that an important aspect to consider is what style of beer you're oaking. If you are adding oak to a big beer that you are planning on aging a long time anyways, you can add oak incrementally and taste it until it is about where you want it. You might want to go to the maximum amount of oak flavor that you like before racking off the oak because oak flavors will age out over time.
Another reason to pay attention to the style when deciding this is because stronger flavored styles (i.e. barleywine and RIS) will need more oak for a significant flavor contribution than for example (and a very extreme example at that) an American Light Lager.
As far as the soaking in whiskey goes, most of what I read about that involves the chips being put in a cup or bowl and adding whiskey until it just barely covers them. No dilution needed. Most people soak them for 1-3 weeks it seems.
I would suggest you do a search as well because there is a lot of hidden information that might be helpful on these forums.
Last but not least, I found this when I did a quick search, and I have not yet listened to it myself, but it might be way more helpful than my post.