Pox, it sounds like you're doing an IM month with one of the IM chiefs as an attending. The reason I want to clarify is that most of the folks who replied to you are not in IM, and instead are likely thinking about what the situation is like in their specialty. In IM, the chief resident is completely different than chief residents in any other specialty -- IM chiefs are attendings, and have attending priveleges. The only difference is that they've committed themselves to the education of the IM residents for a year (and they usually don't get paid as well as regular attendings). This is an important distinction, because IM chiefs often have either been attendings for a few years before their jobs, or they've completed a fellowship and then came back to do a chief year -- so they're not "just another resident". Usually when the chiefs write letters of recs, they will say "I was so-and-so's attending" in their letter in order to clarify their role.
If you are applying in IM, most IM programs will understand what the position of the chief resident is, so it's not a terrible thing to get a letter from the chief. That said, it's still better to get a letter from a tenured or more senior faculty member. If you can, try to do other rotations where you are working with someone more senior. If you can't get that scheduled, talk with your PD and see what he/she thinks. The PDs are often pretty in tune with how certain letters may come across, since they read these things all the time when they review apps.
