Yeah, that egg things a joke. I work with kids, and one kid was asking me about working out, and another kid said "I bet you can't break an egg with one hand!" So I take an egg, and put it in my hand just like he told me to (to make sure I wasn't somehow cheating). I squeezed the egg with my arm straight out so I wouldn't break it all over myself, and it exploded all over the kid, and some innocent bystanders. Eggs don't have chi.
I'm really unsure about the whole "chi" thing. I do not believe you can generate some sort of crazy force with this chi, but I do believe you can have very good control over your own body. I believe having complete control over your breathing, movement, etc, you have "chi". I guess it depends on your perception of what is the mystery that is CHI.