Here's a long list of suggestions from WikiAnswerers:

• Eat dairy products with it like: Soured cream, yogurt, cheese, milk or a glass or milk. DO NOT UNDER ANY CIRCUMSTANCES keep drinking a drink after every mouthful as it makes the chili seem even spicier!
• If it is too acidic, use a pinch or more of Arm & Hammer Baking soda to neutralize the acid. Carrots offer a sweetness and absorbs the acid. Try one in your pasta sauce and see how it will taste before you serve the sauce. Sugar can be used to sweeten if needed, be cautious though. As stated below, potatoes work well also.
• Peel 2 -3 large potatoes and mix them into your chili. Leave in for 1/2 hour, then taste and if it's still too spicy leave it in until your taste test tells you otherwise. Then remove the potatoes and serve. (Mmmmm, I love chili! Not too hot though.) In an emergency when you lack the time for the potatoes to work their wonder, try steps 2 or 3 below.
• Make more chili without spice and add it to the original batch and stir!
• A teaspoon at a time stir in sugar and stir until the excess spice flavor has been masked, or (if you promise to keep it secret) you may stir in pieces of sweet or semi sweet chocolate to contradict and mask the spice, but you must never add so much chocolate that you can actually taste it or (God forbid) so that anyone else would ever guess what it is.
• Put a few pieces of lemon, peel and all, in your chili. This will help to neutralize some of the spiciness. Remove the lemon before you serve it
• Add a few cans of pinto beans and/or diced tomatoes. Just avoid any that have added seasoning.
• Dairy helps to neutralize hot foods so if you are in a hurry and need a quick fix you can add either sour cream or plain yogurt as a topping.
• Add a dollop or two of honey. You can't taste the sweetness but it knocks out the spice. It really works.
• Penzey's Spices sells a heat free chili powder that I love. My stomach (and mouth) can't handle capsaisin, which is the chemical in peppers that makes them hot, this chili powder is all real chilis with no capsaisin and it is delicious. Using this alone makes heat free chili or you could mix with the chili you already use to make a milder version. This spice site sells a variety of chili powders with all heat levels. If you love to cook, look them up!
• The best kept secret to improve chili's acidity comes from an idea from Emeril Agasse that I use. If your making a huge batch like I do, heat in microwave for one minute or on the stove, a quarter cup of apple cider vinegar, once its hot, stir in two tablespoons of table sugar and dissolve. Add it to the chili and its wonderful. If you get it a hair too sweet, add salt. The mixture is called "gastrique" (gastreek), works wonder in any tomato based sauce.
• Adding some sugar or honey to neutralize the acid. you can add little by little until you reach your desired flavor level.
• You can use baking soda. The baking soda ingredients tend to neutralize Ph (acidity level). One or two tspns will work.
• Add to the sauce 1/4 cup of hot apple vinegar/wine vinegar with 1 tspn of honey dissolved in it, or 2 tspn sugar.
• Serving chili over white rice is tasty, tones down spices, and even stretches the recipe a bit. Each person prepares his or her own portions of rice with chili topping to individual taste!
• Try adding water and cooking longer. Heat applied to chilis calms down the kick a bit. Maybe milk also, and cook it out.
• The only real way to do it is to add additional other ingredients -- more beans, meat, sweet peppers, tomato products, etc.... this will essentially dilute it. Other than that, you're stuck -- once it's integrated, there's little to do that will isolate the spiciness and allow you to remove it.
• Adding plain yogurt will calm the fieriness down in both chili and curry.

Don't use powdered chilli or chopped fresh chilli. At the stage when you fry your garlic, add twice the whole chillies you'd normally use (count them!).; just take the stems off Taste your sauce at intervals and when it's at the heat you want, fish out the chillies. This is why you counted them, so you don't leave any in there.