Yes, Chicago streets are very bicycle-friendly. Most of the major streets have bicycle lanes and there are lots of people who bike - to work, running errands, etc. Also, there is an excellent bike path that runs from north to south along the lake across most of the city, a lot of people use that if they don't feel comfortable biking on a street. There's even an official "Bike to Work" day that the mayor's office sponsors.
The city of Chicago has a bike sharing program: http://chicago.bcycle.com/
Some places I know where people rent bikes:
This is an interesting biking link:
cheers about 10 years ago