I struggled with chafing in a big way, had it ruin more then one hike till I found the answer, skin tight spandex shorts
I wear both the UA brand, and the Walmart brand, the UA are more comfortable, and quite effective at eliminating odor; I wore them on a 3day/2night trip last spring as my only "unders" and not only did I not chafe, for the first time ever, they were as comfortable when I got home as when I put them on, and most surprisingly, they did not smell! (yes I smelled them to check) The walmart brand ones, they smell after a day of paintball, so I would not rely on them for back-country use.
(I got this kind, not from here though, http://www.citysports.com/citysports/product.asp?prod_name=Under+Armour+Men%27s+UA%AE+Boxer+Jock&pf_id=115867&dept_id=8426&s_id=0&dl_id=84&%22)
These have made such a tremendous difference in my hiking comfort, I now have 4 friends who "converted" and all agree, never go back to anything else for hiking!

