Chaos damage is poison in some cases, but not always. Chaos damage ignores armour, elemental resistances and energy shield. The only way so far to have resistance (in this case immunity) to chaos damage is by getting Chaos Inoculation from passive skills tree. If you have high evasion you can dodge some chaos attacks (like the "Viper Strike").
With the release of Open Beta, several forms of chaos resistance now exist in addition to Chaos Inoculation, including several nodes, armor affixes, and chaos resistance flasks.
Sources: Official forum , PoE wiki
No, multiple instances of the burning ground damage from Fire Trap will NOT stack.
Only different sources of burning damage can stack. For example, an Ignite debuff from a spell's critical hit and the Fire Trap ground burn will stack.
When 2 of the same burning sources are present the highest damage source will take effect. Multiple effects can still apply, like 2 Ignites on one mob, but only the highest damage one will actually deal damage.
Once the highest damage effect ends, if another instance of that effect was applied and still has duration left, it will then do what damage it has left. This goes for Righteous Fire, Ignite, and Fire Trap's ground burn effect. Searing Bond, a recently added skill, is an exception and the beams can stack with itself.
This is why you should try to spread out Fire traps a little bit whenever possible.
Posted by Mark_GGG, PoE developer and creator of the games skills and their mechanics.
...Ignite, RF, ground fire and now Searing Bond are all separate
sources of burning damage, and all stack. Ignite, RF and ground fire
do not stack with themselves (only the highest of each takes effect at
a time), but do with each other.
Searing bond beams stack.
As of Patch 1.0.5 Searing Bond Beams no longer stack.
Best Answer
It's very convoluted and you're better off reading the wiki example if you want something shown with real numbers but I will attempt to summarize.
1. Determine your overall flat damage, both physical and chaos.
a. Flat physical, flat chaos and %-based physical on the weapon will be local, as in their effect is already calculated and will be shown in the weapons description.
b. %-based increases to chaos damage on any weapons are global meaning it will apply to all chaos damage, this is used later on in step 3, not used here.
c. Flat added damage from rings or abyss jewels is also taken into account.
d. Cobra lash has an "added damage effectiveness" of 125% at level 20 which multiplies your flat damage in this step by 125%. This is special and entirely separate from normal %-based increases or multipliers from passives/gear/supports used in steps 3 and 4.
2. Convert your physical damage to chaos.
a. Cobra lash has a built-in 50% conversion rate.
b. If you had any sources of "adds X% of physical damage as extra chaos damage", this would apply here as well but in a slightly different way than converted damage.
3. Take into account all of your %-based increases
a. The unconverted portion of your physical damage will be affected by increases to physical damage or generic damage increases such as one-handed/attack/proj damage.
b. The converted 50% to chaos of your physical damage will be affected by your physical damage increases, your chaos damage increases and also any generic damage increases.
c. Any Chaos damage you have that was not converted (flat damage from your weapon/rings/cobra lash itself) will be affected by chaos damage increases and generic increases.
4. Apply all more/less multipliers
a. Calculate your total generic more/less multipliers first
b. Calculate all physical specific multipliers and chaos specific multipliers
c. The same as step 3, unconverted physical receives both generic and physical-specific multipliers, physical that is converted to chaos gains all 3 multipliers, and chaos that wasn't converted from physical gains generic and chaos specific multipliers.