Is the chip on the brake contact surface or the outer edge? If the the disk rotor surface is not completely smooth, warped or not seated properly the brake pedal will pulsate/shake.
New pads on rotors with the above problems may aggrevate the shaking.
Try having the rotors resurfaced by a competent shop. They can also tell you if you have enough "meat" remaining on the rotor to safely resurface.
