First thing to know. Chao have stats, which determine their strength. These are the different categories of stats:
PWR - How powerful your chao is.
SWM - How good your chao swims
FLY - How good your chao flies
RUN - How fast and less clumsy your chao runs.
LCK - How lucky your chao is.
INT - How smart your chao is.
STA - How long your chao can last without a performance hit.
These stats can be altered.
As you progress through the game, you will see animals and glowing tubes. The animals, well, are....animals. The glowing tubes are called Chao Drives. They both raise some parts of stats, and decrease others. Each color adds most to a certain stat, as follows:
Yellow - Adds to SWM stat.
Purple - Adds to FLY stat.
Red - Adds to PWR stat.
How do you tell which animal goes in which group? They will have a colored border around them.