They look similar to the Neutral Chao, only with a couple of changes. Instead of light blue with yellow tips on its head, hands, and feet, it's white with blue tips, and instead of there being a tip on the top of its head, the head is round and has two small circles on the very top. Plus, instead of having a (not so wide) tanish-colored oval in the center of its belly like the Neutral Chao, the Hero Chao has a light yellow oval in the belly's center. It's sometimes hard to see it. Also, the B&W colors on the chao's eyes are switched from black with a white outline to white with black outline.
One can evolve a chao into a Hero Chao by feeding them Hero Fruit, and raise that Chao with Sonic, Tails, and/or Knuckles. Once they go into their first cocoon, the Chao will be a Hero Chao. The only way to get Hero Fruit, without cheats, is to buy them at the Chao Kindergarten's Black Market (only available in Sonic Adventure 2: Battle and Sonic Adventure DX).
One can evolve a Hero Chao into a Hero Chaos Chao, also known as an Angel Chao. To get this kind, a chao must be a Hero Chao, and must have gone through two reincarnations already. This means one must first let the chao die twice and be reborn. Chao will usually be reborn if they were treated nicely. Once the Chao is on its third life they'll have to receive at least one of all the small animals (which can be found in the game's stages, except for Route 101, and Route 280) before the Chao has evolved to the second stage of its third life.