Go to the dealer and purchase the OEM touch up paint...
Then Clean throughly and dry the chipped area. Next you would have to apply the touch up paint in thin layers (this takes time). Apply layer by layer, and let it dry in between layers. If the car is metallic, the key is to apply a very thin layer each time so that the metallic flakes dont sink to the bottom of the chip.
So after the chip is filled up- the chipped area should be filled with touch up paint and it is not leveled (not even/smooth).
Now you have two choices: A. Buy Langka's Blob Eliminator to remove the excess blob or B. Purchase Wet Sanding Paper 2000-3000 Grit and sand it down.
If you go with B, let the sand paper soak a few hrs or even overnight before using it. Preferably use a sanding block or something that has a flat surface. Lub the area a lot while wet sanding; you may want to carry a spray bottle with a bit of car wash + water to keep it lubed up. When sanding the area go in one direction, do a few passes and make sure it goes over the original paint too (not just the chipped area). Always check your work, if its not leveled keep going, it shouldn't take many more passes. But remember to stop and check.
Now after the chip is leveled with the original paint, the area you wet sanding should be hazy/ marred/ scratched. Now use a rubbing compound, ie: 3M PERFECT-IT III RUBBING COMPOUND (fine or medium grit) and go over the scratched area with the rubbing compound using back and forth motion. After a while, the scraches should be pretty much be gone. Then finish up with a Final Polish, ie: 3M PERFECT-IT SWIRL MARK REMOVER to make it shine again.
*I'd recommend using 3000 Grit if available, becuase when you use the rubbing compound, the scratches are easier to remove than using 2000 Grit.
Here's a page where I found the stuff on Autopia,
http://www.guidetodetailing.com/articles.php?articleId=27, there are more details and some pictures for reference
