Level 274 now. I never buy chips, but I understand that if you do, you're no longer restricted to three rewards per trip (not sure if you can do that with a $5 purchase). I've heard of people spending thousands of dollars on chips. Poor bastards, spend $1000 to get $300 in free comps.
Like ecomstock, we get our rooms comped and stay downtown. We'll use our yellow chips for shows and a few buffets. Used to be more generous; back in March, we got about $800 worth of stuff (CC Steakhouse, top-tier Terry Fator tix, some buffets).