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In the chaos codex, for the gift of chaos psychic power, it states, "and, as no wounds are taken, no saves apply!" So, does this mean models killed by it do not get invul or cover saves either? Normally an attack has to specifically say it ignores invul/cover and so on but I think that may be implied here. What do you guys think?

For anyone that plays fantasy, it seems like a pit of shades of sorts.

I dont have this 'dex, so without knowing more than your quote, no saves means no saves. There are three saves, armour, cover, and invuln... however, each is a "save". So, to deny "saves" means to deny all of them. Also, the root of the entry you quotes states that no wounds were taken. Saves only typically apply to models which actually take a wound and as this ability doesn't actually confer a wound, saves would be irrelevant.

That is what I am thinking but you will always have those people that will complain/cry cheese when you kill their Avatar and Eldrad with one power in one turn...hopefully. But, thousand sons are anything but cheesy this time around =).

This rule seems nearly identical in the "saves" aspect as the Boon of Mutation discussed in this thread.
http://www.dakkadakka.com/dakkaforum/posts/list/213720.page

They came to the same conclusion that no type of save is taken for this power as it also states that "no saves apply". There you have it.

It says no saves allowed. So there are no saves. Simple as that, but most people will try and convince you otherwise when their C'Tan/Avatar/Bloodthirster or whatever ends up as a spawn. I've had people try and pass it off as a typo. lol