Using a large saucepan on low heat, melt the chocolate chips into the condensed milk. Remove from heat and stir in vanilla.
Pour into a medium bowl, cover amd chill 2 to 3 hours, until firm (Note: placing in refirgerator will cause mixture to hardern.)
Roll into one-inch balls and roll in your favorite coating and/or decorate with frosting or candies. Chill for another hour until firm. Store leftovers covered in refrigerator. (Mine must be set on flash-freeze; my truffles always harden too much in there.)
NOTE: Although many people do not have to worry about fat content, it can be reduced by using the fat-free variety of condensed milk. Also, I like to play around with the chocolate chips, substituting a few ounces of white chocolate for some of the bittersweet, for example.