What's this new chip/ "tuning" thing all about?

["BRUCE, ERIK D. -ERDB" <ERDB@chevron.com>]

All right, I'm an poor ignorant s.o.b. when it comes to engines & car
performance, I'll admit it.  A question keeps coming to mind when I read
some of your discussions about "tuning" cars to increase performance:
What's this "tuning" thing all about?  How do you turn table wine into
champagne?

Specifically:
1.   Chip upgrades.  Huh?   How do you get the A4's 1.8T engine to 170
or whatever hp when 150 was all Audi got it to?  Several of you have
written in general about aftermarket chips to boost hp, which may or may
not be available for specific engines.   I think I understand what the
engine's CPU does, controlling fuel mixture, timing, etc.,  but why
would a different chip have such a marked effect on performance above
what the mfr. intends?  From the various discussions I've been reading,
sometimes a new chip helps dramatically, sometimes not - depends on the
engine.  Why?

2. I'm assuming you must give up something to get something here - fuel
efficiency, engine life, parts life, your first born son, etc?  What's
the catch?

3. Key question in my mind:  Why wouldn't Audi tune the engine up to
maximum performance themselves?

4. I've read much about upgrades to the 1.8T, but so far I haven't heard
anything about anybody tuning the 2.8 V6 to higher hp with simple chip
upgrades (maybe because I've just started to read this list).  Does the
V6 have any potential for increased performance from simple aftermarket
modifications like a new chip? (not talking adding a turbo or other
expensive stuff here)

Somebody want to help me with this?   Thanks, all!

Erik Bruce    erdb@chevron.com
Richmond Ca
Drooling for a A4Q 30v next year  (when my piggy bank is full)