My just-turned-5-year-old has these on her chore chart:
put clean clothes away (I put them on her bed)
give cat water
set the dinner table
help put food away and dirty dishes to sink after dinner
put her breakfast dishes in sink
make bed
have all toys/books/clothes off bedroom floor by bedtime
My 8 year old does most of those but they aren't on his chart anymore... now that he's in the habit, he just does those. His stuff is more like plan dinner menu 1 day a week, help cook dinner a few times a week, feed/water dog, walk dog, pick up sticks before we mow yard, etc.
The kids have opportunties to do more for extra $... stuff that isn't really normal everyday living stuff. Like helping to spread the mulch around plants, wash the cars, trim the bushes, cut/carry branches from a tree that falls during a wind storm, etc.
I just draw a grid on a piece of construction paper for each kid every week. That way we change up what they need to do - we're always adding more or removing stuff as it becomes habit.
Our 5 year old gets $1 allowance, the 8 year old just got an increase on his birthday last week to $2 (a week). We usually keep the allowance separate from chores. They don't help out around the house for money - they are expected to help out around the house because they are part of the family. The allowance is tied to behavior, however - especially for our son (ADHD, Asperger's, Anxiety issues, highly gifted) because it's a great motivator for him and he struggles with basic social interactions due to his disabilities. We use the 1-2-3 method but time-outs are meaningless to an AS kid who craves time alone and sees it as a reward. So we take away 10 cents if/when we get to '3' on a behavior thing. We will take away some of the allowance if a certain chore is routinely not completed but that doesn't happen very often.
Many experts say the purpose of an allowance is to teach kids how to handle money. It's MUCH better for them to blow $20-$50 when they are 6 or 7 years old, and learn how to not impulse buy, then when they are teenagers (heck, many adults never learn this!). So we don't really enforce rules for their money... they can save it, they can blow it on candy or comic books or video games or give it away. For the first year, my son spent it as soon as he got it... and regretted it the next day. Took him awhile, but he learned and is now saving up for a video game he wants... it takes a long time with $1/week (now will go faster with his birthday 'raise') but he's sticking to it and learning valuable lessons. He also saves birthday/Christmas money and is close to his goal (been saving for 4 months). Last year he actually saved enough to buy a $70 lego set. Just before that, though, he blew $30 on some toy he saw on TV and begged us to order online for him. We tried to talk him out of it, saying how commercials dont' always tell the truth, make toys seem better than they are, etc but he persisted and we did it. He learned that lesson the hard way, but at least he learned it. :-)
My 5 year old just turned 5 and just started an allowance. She'll learn alot more about counting money in kindergarten this year. I'm sure she'll blow it on trash for awhile, but she'll learn.
The amount depends on what you want them to spend allowance on. When my son went to $2 we told him we were no longer going to buy him candy. If he wants something at the ice rink or ball field concession stand or candy store, he has to spend his own $$. If the kids want soemthing at a souvenier place like the local zoo or Children's Museum (we go to both often), they spend their own $$. If we go out of town to somewhere special, we'll buy 'em soemthing from the gift shop or tell them we'll give them $5 or $10 and they can spend their money to buy somethign more expensive.