Originally Posted by
melville
The chain shouldn't have tension on it, but should have a wee spot of slack even in the tight spots. The old trackies' trick is to set it as loose as possible, pick the bike up, give the cranks a good hearty spin, and shake and invert the bike to see if it comes off. l
Sorry, this sounds like a load of bull**** to me. You definitley do not want loose like you are describing if you're on the road. You'll drop the chain with nearly every bump.
OP: Read this on how to set your rear wheel correctly with the proper tension.
http://www.sheldonbrown.com/fixed.html#tension