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?

I use chocolate chips all the time! So far so good

I only use ganache now and chocolate chips are fine, but if you use milk chocolate, use a 3 to 1 ratio. Semi-sweet and bittersweet is a 2 to 1 ratio.

I've used semi-sweet chips, but not to cover a cake. I've used it for filling. Recently I tried using Hershey's Bliss white chocolate Meltaways. That was a bad idea. Don't use something like that. It set up nicely, but as it sat at room temperature it started to seperate and made my fondant slip off the cake. Lesson learned the hard way.

Ok, great! Thank you everyone for your kind advice!