We have not tied allowance into chores. In fact, we don't even have chores. I just ask the kids to help out when I need it and that could be any variety of tasks. Like many others, I consider this to be just part of family life and not something they should get paid for.
I also recently instituted Gail Vaz-Oxlade's system for teaching kids about money and she argues well against tying allowance to chores.
Right now my kids get $5/week and that will be upped to $7 a week when DH goes back to work (he's been laid off for a bit) so that they can divide their allowance into various savings jars a la Gail's system.
That amount has sufficed for them for some time, however DD in particular is starting to want more things for herself and has expressed an interest in earning extra money. I now pay her to do jobs that would be mine, such as walking my dog when I'm not around (she's really more my dog than the family dog) or other things that are not part of regular household stuff.