I've been thinking about trying to cover a cake with ganache instead of using buttercream, as I always end up with air bubbles and bulges. I understand I need to use a 2:1 ratio of chocolate to cream- is it ok to use chocolate chips?

Some people have succes with chocolate chips, but it's generally a good idea to avoid them when making ganache. Using block or bar chocolate is more time consuming, because you have to grate it or chop it very fine, but the results are well worth the effort. I use ganache under my fondant whenever I can and I've used it more than once as a frosting and/or filling. I just love it!

the ratio of 2:1 is in weight. So say 10 oz of cream to 20 oz of chocolate. Not a cup of cream to a 8 oz of chocolate. (that's dark chocolate. White and milk can be more of a 3:1)

I use chocolate chips all the time with great success. I use 12 ounces semi sweet chocolate chips, 3/4 to 1 cup cream, 2 tablespoons butter and a splash of vanilla. Heat cream and chocolate stir until melted add butter and vanilla. I usually use 3/4 cup cream but if I want to pour the ganache over a cake I increase it to 1 cup. If I am using it to frost under fondant I let it sit out on the counter overnight to set up.