All of the dogs are chipped and one of our cats. All dogs were chipped awake except Nog, who I was waiting to chip until we finally switched to Home Again. We switched around the time he was neutered, so I had it done then. I presume Newt was done when awake as she was not spayed at the time she was found as a stray and had, we discovered, been chipped by her breeder.
None have had issues with their chips migrating. None (even Jules, who is a weenie) have minded the needle size. Goose was done at 8 weeks when I brought her home and I honestly don't think she even noticed.
My dogs wear tags, but I like the added security of a chip, since tags can fall off, etc.