My chocolate stout, which I have brewed a couple times now, has a slightly chocolate cake flavor to it. ... I use cocoa powder instead of chocolate chips, 1lb added at the end of the boil. This is also how Jamil Zainasheff suggests using chocolate, and letting it sit about three weeks will draw out all the chocolate flavor, then you can siphon off the chocolate sludge and not have it in your bottles...
I would suggest the use of bakers chocolate or cocoa powder instead of chocolate chips. Chips have a higher fat content which will kill your head retention.
Pretty much the only thing concerning beer that I generally disagree over is how to properly add chocolate flavor to a brew. The following is how I learned to do it, the way that yeilds the best flavor, the least mess, and the least detrimental impact on head retention, etc etc. I don't put this here to trump any of the other methods mentioned, and I leave it to the OP to choose what he'd like to do for his brew.
Chocolate stouts have been a thing of mine for a long while. I've read nearly every article, report, write-up, and recipe for about every chocolate stout there is. In addition, I've talked to brewers at Austin Homebrew and Young's Brewery (the makers of Young's Double Chocolate). This is what I've learned:
Bar chocolate, chip chocolate, really any solid chocolate has no place in a beer. It adds minimal flavor, but maximum mess in the primary/secondary.
More or less the same goes for heavy additions of cocoa in the boil. This is why: when you add chocolate to a beer before it's actually beer (ie: before there's alcohol), it will fall out of suspension and end up on the bottom of your primary. Case in point: make a cup of hot cocoa and let it sit for two weeks. You end up with a layer of precipitated chocolate at the bottom, and sugar water.
The reason recipes calling for cocoa in the boil need to add so much of it to get any chocolate flavor at all is because, as mentioned, 95% of it falls out of suspension before it can be incorporated. There needs to be alcohol present to dissolve the cocoa and keep it in
solution.
Your initial thought to add the chocolate to the secondary was a good idea. The chips, though, are not ideal, for reasons already mentioned. Your best bet is boiling the 1 oz cocoa with your priming sugar, and adding that at bottling. Just type cocoa into the Austin Homebrew page to see what I mean.
Unsweetened, dutched cocoa is the best for these purposes, as all of it dissolves into the beer. With bar or chip chocolate, you're going to be left with precipitates, and the flavor profile isn't what you're looking for.
Ultimately, you're going to get twenty different answers regarding how to do this brew. Since you are, in effect, the brewmaster, it'll be up to you to pick and choose the best ingredients and factoids to apply to your stout. Let us know what you decide on.