I have been using chameleons constantly since the old edition of the army book came out. However, I haven't used them with the new edition so some tactics might need revising.
I usually deploy them as close to the enemy I can get, preferably close to juicy targets. By juicy targets I principally mean giants, other large creatures with low armour, light cavalry and perhaps a unit that I intend to charge and break in the opening turns. Basically the tactic is to 1st of all slow down my opponent by preventing marches and to take down said juicy targets (I used to field 2 units of skink scouts but alas that is no longer possible).
As to best number, I used to always field 10. They are slightly costly but they usually get the job done (removing a rank, killing a couple of fast cavalry, causing a couple of wounds on a giant). In the current version of the rules, 10 could be a bit too much (especially when considering that they no longer have the deployment special rules - therefore a bit more difficult to hide).
They are usually a general pain in the backside for the opponent but they are skinks after all and they are therefore as fragile as they come.
Main threats: flying nasties and magic missiles
Hope this helps!