I heard from a friend of mine that the "bubbles" on top of a Chao's head indicated its gender. I thought it had something to do with its "happiness rating" or whether it was going to evolve into a Hero or Dark Chao. Please help settle this argument!
Chao have no gender. The colour of the chao-ball only relates to the chao's type. If you give a chao a lot of a single type of drive or animal, the ball's colour will change.

~ Crazy C Lea