Adjective: Fraudulent or of bad or inferior quality.
The Miami Hurricanes suck this year, they're fugazi.
Fragile or injury prone. Usually used in describing a talented athlete with a knack for getting hurt at inopportune times. Refers to the brittle nature of the snack food.
Marcus Camby is a good player but he's a potato chip, he hasn't been active for half the games during his career, nursing one injury or another.