Tips and tactics
Chaos Bolt pierces through Fire resistance
Chaos Bolt pierces through Absorption effects (i.e. Mana Shield, Anti-Magic Shell).
Chaos Bolt pierces through resist effects (i.e. Cloak of Shadows)
Chaos Bolt damage is reduced normally by Damage reduction effects (i.e. Pain Suppression.
Something to note here is that Cheat Death describes the talent as a damage reduction but the actual game mechanic it's an absorption thus Chaos Bolt pierces through Cheat Death.
Chaos Bolt does NOT penetrate full immunities (Divine Shield and Ice Block). It is NOT deflected by Deterrence.
Fire Ward is a particularly interesting case. It cannot absorb Chaos Bolt damage however if talented with Molten Shields, as a Fire spell, the mage can reflect Chaos Bolt before it even touches him.
Chaos Bolt does 10% additional damage to targets that are afflicted with Immolate if you have taken the talent Fire and Brimstone, so this spell should always be cast on your opponent before Chaos Bolt. Following up with Conflagrate deals massive burst damage. Even better, pick talent Backdraft and use the Glyph of Conflagrate. Cast Immolate, Conflagrate (proccing Backdraft) and Chaos Bolt (now with 30% reduced cast time). This sequence is sure to reduce most non-elite mobs to a smoking pile of ash! Works well in PvP too.
***** of the Elements increases magic damage done to a target by 13% and should also be applied prior to casting Chaos Bolt in fights of sustained damage.
Before patch 3.1.3, Chaos Bolt was one of the most mana-efficient spells in the warlock's arsenal, along with Soul Fire. It truly shone in PvP because of its short cast time and the fact that it even ignored damage reduction effects like Pain Suppression.
This spell is particular fun in Karazhan where the mana-shielded mobs in the Curator-boss is a major nusiance - bring a Destro-lock and one-shot them with Chaos Bolt.