Re: What is oxidative rancidity and how does it work?

Oxydation is the main quality problem with potato chips because of 
its fat content. It produces an undesirable odor and flavor that becomes 
progressively more intense and unpleasant as oxydation progresses.

Rancidity can be of two types, hydrolytic and oxidative. Hydrolytic 
rancidity happens in dairy products and results from enzyme activity. In 
the case of the chips, we have oxydative rancidity. Basically, oxydation is 
the reaction of oxygen in the air with the fat in the chips. The chips are 
subject to that attack because they contain lots of unsaturated and 
polyunsaturated fatty acids. In some foods, manufacturers are permitted to 
add antioxidants which slow down the oxidative deterioration. The 
antioxidants normally used are butylated hydroxyansiole (BHA), butylated 
hydroxytoleune (BHT) and propyl gallate. Another means of slowing down 
oxidation is to package the food so that it is protected from light and 
oxygen, two things that accelerate oxidation. The chips bags are usually 
filled with nitrogen, with takes the place of oxygen and protects the 
products from being crushed in the transportation.

You can find a science project about that subject at:
 http://www.eduzone.
com/tips/science/gaoxidat.htm

Please reply if you want more details.

Reference: Principles of food chemistry. DeMan, AVI Publishing Co.