Our kitties are both chipped. It's permanent and safe. The chip is in glass that doesn't interfere with tissue. It's 12 - 14 mm long.
Kitty was taken from a newspaper ad by my friend's younger sister when she wanted a kitten. She gave him to my friend when she got tired of him and wanted a new kitten (she ended up getting Max). Our feline hospital charges $55 for HomeAgain, which is where we got Kitty chipped (Max also, and we paid for it). When we adopted Robin from the shelter, she was already chipped with Avid (I love that IL is an above average state when it comes to chips). If you can get it done at shelter-sponsored clinic, for example, it can be as low as $10. Registering or changing chip info costs around $6 - 15, iirc.
Kitty seemed to mind the chipping injection less than the vaccines. It's injected just under the skin on the back between the shoulder blades. They're quite effective; in the US, most shelters and such have scanners that can scan both Avid and HomeAgain. Where chipping is mandatory, return rates of lost animals are far, far higher.http://www.saveourstrays.com/chips.htm
<--Microchip Identification: High Tech Animal Lifesavers by Bob Christiansen