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The quality of chakra can be altered with what is called nature manipulation (性質変化, seishitsu henka?). There are six kinds of nature manipulation, five of which have been identified. They are Earth, Water, Fire, Wind, and Lightning, also commonly referred to as the five elements. There has been known to be something known as Yin/Yang Manipulation but was never detailed on, and there have also been known to be a Space/Time Element.
Generally, every ninja has a natural affinity to one of these elements, and thus can learn jutsu relying on that element with greater ease. Skilled ninja can also learn to use other elements. Most Jōnin are able to use two different elements, while Kakashi Hatake has been shown to use four of the five.
Based on which jutsu the ninja uses, the type and amount of chakra will be different as would the elements you would be to employ. Each ninja has the potential to better utilize one of these styles and potentially more. A special elemental detecting paper is used to determine ones type. The paper comes from trees which are specially grown with chakra. When the ninja imbues the paper with a portion of their chakra, the paper will alter to reveal one's type. The paper will rip in two for Wind, burn for Fire, become wet for Water, fall apart for Earth and crumple for Lightning. For example Kakashi is a predisposed Lightning type, while Sasuke is both Lightning and Fire for the Uchiha clan specialty.
The five elements themselves form a cyclical strong and weak relationship against each other. The element of Fire is stronger than Wind, as the usage of Wind merely increases the strength of Fire. So if a Fire jutsu came up against an equal strength Wind jutsu, the Fire jutsu is more likely to win out. Wind in turn is stronger than Lightning. Lightning is stronger than Earth and Earth in stronger than Water. Water finishes the cycle by naturally winning out over Fire
The 5 Basic Elements
Katon - Fire
Katon, or Fire Element, takes the form of fire and flame attacks. These can be fire balls or extended flame throwing. Fire is typically a specialised offensive element.
Raiton - Lightning
Raiton, or Lightning Element takes the form of electrical and lightning based attacks. When used in conjunction with metal based weapons, the power becomes amplified. Lightning is good for middle to long-range attacks.
Fuuton - Wind
Fuuton, or Wind Element, takes the form of wind based attacks. These can be huge gusts or sustained wind storms. Wind is typically a specialised offensive element, good for close to mid-range attacks.
Doton - Earth
Doton, or Earth Element, takes the form of earth and mud based attacks. These can be walls made from mud or the ninja maneuvering himself below ground to attack his opponent from below. Earth can change the hardness composition of objects, making something hard as steel or soft as clay.
Suiton - Water
Suiton, or Water Element, takes the form of water based attacks. These can be walls of water used as shields or water formed into large striking jets. In this regard, Water is very diverse when it comes to shape modification.