Heat the oven to 400 degrees.In 12" skillet, over medium high heat, heat 1 tbsp. vegetable oil;add onion and chili powder;cook about 10 minutes, stirring frequently, until onion is tender and coated with chili powder.Remove onion to large bowl;wipe skillet clean.To bowl with onion, add beef, egg, chilies, bread crumbs, 1 tbsp. Of each of cheeses and salt;using hands or wooden spoon, blend well.Shape mixture into 1 1/4" balls.In skillet over medium-high heat, heat remaining 2 tbsp. Oil;add meat mixture;cook 15 minutes, turning frequently, until well browned on all sides and cooked through.Meanwhile, place tortilla chips in single layer on jelly-roll pan;bake 10 minutes until crisp and golden.Prepare Zesty Tomato Salsa.To serve:Spoon meatballs into center of large serving platter;sprinkle with remaining Monterey Jack and Cheddar cheese.Arrange tomato wedges and lettuce around meatballs if desired.Serve with tortilla chips and salsa.Makes 4 servings.

Zesty Tomato Salsa: In a 2 qt. Saucepan over medium high heat, heat 1 tbsp. 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. Cook about 10 minutes, stirring frequently, until tender.Stir in 2 large fresh, ripe tomatoes, diced (about 2 cups) and 1/4 to 1/2 tsp. Hot red pepper sauce;cook 1 minute longer until heated through. Makes about 1 1/2 cups.