Cookie was chipped when she was still living with the breeder and was 7 weeks old. It's so small that I can only feel it if I really search for it. It was painless for the pups when they got it implanted.
In Germany you get a tag to attach to the collar. If someone finds your dog, they can call the number on it and tell the dogs registration number which is on it too. And they do the rest. The dog is not registrated somewhere else, only at the chip company.

We're chipping our cats as well when they get their vaccs this summer. So much better that the tattoes they have in their ears (was already done by the shelter). In Germany animals remain the possesion of the animal shelter after adoption, so we'll have to registrate them on behalve of the rescue organisation.