Chimera creates a second genotype on your dergon, created from the same source as the original geno. (Parents will basically create another hatchling, while an egg will roll similar results from the same rarity.) This second genotype appears in patches over the dergon, creating a patchwork effect of two different designs.

It will appear in the geno as an additional genotype and phenotype string, like so: 

Healthy- Chimera
Ww/Bb/xx+c/Gn[+Ww/Bb/xx+cm/Gn]
Base with Gene + Chimeric Base with Gene

This second set of genes will have no passrate when the dergon is bred, without the use of an item to include them in the passable genes!

Chimera's two genotypes should appear roughly equally, although the balance may skew to as much as 70%/30%. It does not matter whether the original geno or the chimeric geno is more visible. 

If a Color Mutation is present, Chimera can generally show above or below the effect of the mutation (Variegation will always show above Chimera, as it's an expression of pigment destruction). Chimera may even allow two different color mutations to appear on different sides of the geno, if one is present on the original geno and another appears on the chimeric geno!