Simply means you have an small eprom epoxied on the adapter. Think adding ROM to a 3cam or 'chipping' an old Nikkor.
Your Canon is fooled into thinking there is an AF lens attached, so it enables focus confirmation within the body and records the programmed focal length and maximum aperture in EXIF with each shot.
There is also a LOT of debate on this (and I'm not going to get into it) but some believe (myself included based on my experience) that the recorded FL and max aperture also aide in manual focus accuracy when using the body's manual focus confirmation light path.
Most chipped adapters come encoded for "50mm F1.8" or "50mm F2.0". Rudolph (mentioned in earlier post) will custom-code any adapter you buy from him (they are very good) for no extra charge if you mention what you comment in a 'note to the seller' on eBay at time of purchase. I get them on the Canadian East coast from HK within a week - Oz should be snappy, snappy.
The trick with a chipped adapter is to find quality ones. If the chip is not located accurately so that each of it's contacts cleanly meets it's intended mate on the camera mount, you can cause error messages - or in VERY rare cases, a short.
I have had very good experience with Rudolph's adapters and his customer service is top-drawer.
Hoada (sic?) - not so much. Stay away.
Kindai/Cameraquest - very nice, top but reasonable prices, black anodized. No chip.
Son used to make custom adapters for exotica - not sure he still does or not (some lenses require ultra-thin or thicker or very low tolerance for defects than is seen with the adapter to achieve infinity focus and/or avoid distortion).
Novoflex makes units, but VERY, VERY costly. For R-EoS adapters, Novoflex uses the same mount hardware as does Leica for the R bodies.
Fotodiox makes respected units. No chipping.
Every 3rd villager in China with a lathe and a mill seems to be kicking these things out - so buyer beware. Too cheap - junk, $300 (Novoflex) - give me a break.
Cheap adapters can be too thin, too thick, sloppy fitting (on either side), not flat, uneven plating, eprom PCB not placed properly, etc. Saw a thread some time ago where the workers took a rasp to an adapter's PCB to get it to clear the mirror when it was placed incorrectly.
When you get an adapter, simply use a thin flat blade screwdriver to tweak the adjusters (it will be obvious when you look inside the rim of the adapter) to ensure a very snug fit on the lens. Rest is as with any ROM lens.
John Black at
www.pebbleplace.com has a great tutorial on using/adjusting chipped adapters. Not much to it.
That's the one sweet thing about Canon DSLRs - that sensor can be used with damn near any glass out there.