In a saucepan, stir together chili sauce and grape jelly.
Cook until blended over low heat. Use a whisk to break up grape jelly, if necessary.
In a large bowl, combine ground beef, onion, salt, pepper, and egg. Use a meat chopper to break up hamburger meat, if necessary.
Shape ground beef mixture into nickel-sized meatballs.
Add meatballs to the sauce and cook over lowest heat for about 1½-2 hours or until meatballs are cooked through and the sauce has thickened. Stir occasionally.
Remove from the heat and skim off the fat, if necessary.