2In 12" skillet, over medium high heat, heat 1 tablespoon vegetable oil; add onion and chili powder; cook about 10 minutes, stirring frequently, until onion is tender and coated with chili powder.
3Remove onion to large bowl; wipe skillet clean.
4To bowl with onion, add beef, egg, chiles, bread crumbs, 1 tablespoon of each of cheeses and salt; using hands or wooden spoon, blend well.
5Shape mixture into 1 1/4" balls.
6In skillet over medium-high heat, heat remaining 2 tablespoon oil; add meat mixture; cook 15 minutes, turning frequently, until well browned on all sides and cooked through.
7Meanwhile, place tortilla chips in single layer on jelly-roll pan; bake 10 minutes until crisp and golden.
8Prepare Zesty Tomato Salsa.
9To serve: Spoon meatballs into center of large serving platter; sprinkle with remaining monterey jack and cheddar cheese.
10Arrange tomato wedges and lettuce around meatballs if desired.
11Serve with tortilla chips and salsa.
12ZESTY TOMATO SALSA: In a 2 quart saucepan over medium high heat, heat 1 tablespoon vegetable oil; add 1 each red and green bell pepper, cored, seeded and diced (about 2 cups), 1 medium size onion, diced (about 3/4 cup) and 1 large clove garlic, crushed.
13Cook about 10 minutes, stirring frequently, until tender.
14Stir in 2 large fresh, ripe tomatoes, diced (about 2 cups) and 1/4 to 1/2 teaspoon hot red pepper sauce; cook 1 minute longer until heated through.