As far as I can tell, "chav" was initially a local term of Kent and Essex for hooligans, ne'er-do-wells and hardnuts, which happened to catch on in the media and was generalised as a catch-all term of hate for the working class. It's unusual in UK culture, because it's a term which explicitly recognises that there are poor and common people in the SouthEast of England (the rich bit). In the past, most of our terms occupying the same linguistic space as "chav" have basically been about racialising parts of the North of England ("scousers", "geordies" etc) and comparing them to effete "southern poofs", so it is interesting that "chav" is explicitly a class-based epithet rather than a regionalist one. If I was writing a social history and in the mood to theorise, I might suggest that the popularity of "chav" as an insult might have begun around the same time as the inquiry into the murder of Stephen Lawrence in Eltham, a part of SouthEast London where it blends into Kent - I can see how the term might have found its way into London media circles via reporters trying to get background on the Lawrence murderers (though interestingly the word itself doesn't seem to appear in Michael Collins' "The Likes Of Us", which is certainly a book about chavs).
Basically, what people can't come to terms with is that if you are looking for the "Bulldog Breed", the stuff that the Empire was made of, chavs are it. The rate of bulldog ownership and Union Jack flag-flying was much, much greater than anything I've seen anywhere else (although to be fair I grew up in a quite nashie part of Wales and have lived as an adult in Central London). But they're basically the same kind of people who I grew up not talking to, albeit that they probably get into a bit more trouble and are a bit sharper, because they don't live on farms. (Probably very similar to yer American white trash too). Not that bright as a rule, keen on settling disputes with their fists, stubborn as hell, capable of great generosity and upholders of a frighteningly complicated unwritten code of behaviour. I think that what scares people about chavs is that if you don't understand the code, they would appear to be frighteningly and unpredictably violent. But I seem to remember that this was a pretty consistent critique of the British Empire too.
I wouldn't really set much store by the Burberry thing or by the fact that there is a certain amount of affinity with black culture (this is IMO overdone; it is true that chavs wear a hell of a lot of tracksuits, but this is more likely because tracksuits are comfortable, practical cheap clothes. Scousers used to wear a lot of shell-suits in the 1980s and that didn't have anything to do with rap music). That's just general cultural weather patterns.
best dd
PS: etymologically, the consensus appears to be that "chav" comes from a gypsy word for a child. The Scottish "ned" appears to me to simply be a contraction of "ne'er-do-well"; "Non Educated Delinquent" is an obvious backronym.
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