We settled on separating "allowance" from chores for our six-year-old girl as follows:
Allowance is $3 per week - $1 for spending money, $1 for savings, $1 for charity. She gets this regardless of behavior or chores. This is to teach her about money - she can expect a steady income and save up or spend her spending money according to her own whims. When she doesn't have it, she doesn't get to spend anything. Not tied to her behavior.
Chores - We have a picture poster showing all the things that she "can do" and how many stars they are worth. Examples: Make the bed, get self dressed, be ready for school, brush teeth, set table, clear table, do homework, etc. Going to bed on time and cleaning up her toys get the most stars, making the bed and feeding the cat get the least. She can also earn an extra star on some chores by doing them without being asked.
We have also made a "rewards" chart showing pictures of things she can cash her stars in for, such as ice cream dessert, two-friend playdate, staying up extra 30 mins on Friday night, 1 hour of TV, 1 hour of computer, etc. These are also weighted, so that TV only takes 10 stars, but she has to accumulate 50 stars to get a trip to the toy store.
So far this system has worked out GREAT for us. Much more positive than taking privileges away when she misbehaves. With this system, when she wants a privilege, I ask, have you earned it? And if she has, it's hers to enjoy no questions asked!