The Nolan chart is a two dimensional political map replacing, or maybe enhancing, the standard left-right model. The original had the up-down axis represent "personal freedom" and the left-right axis represent "economic freedom." The new version has the chart tilted to the side, so that the up-down axis shows a Libertarian/Authoritarian or Libertarian/Statist axis. (There is considerable debate as to what the opposite of Libertarian should be. The original version used "populist," though a populist can be quite free.)
While the chart in itself is not fundamentally biased, the "World's Smallest Political Quiz" (put out by the libertarian Advocates for Self-Government) uses it in a skewed manner. The quiz has ten issues, things like "Government should not censor speech, press, media or Internet" and "Let people control their own retirement; privatize Social Security," which are worded ambiguously enough that people will be more inclined to agree with the libertarian answer.
NolanChart.com uses a different set of questions, which are still slightly biased.
The Enhanced Precision Political Quiz is not as biased, and has reading suggestions at the end.
 Fun with the World's Smallest Political Quiz
The selection of only ten issues and how they are worded can affect the outcome greatly. Take the first example from the World's Smallest Political Quiz, "Government should not censor speech, press, media or Internet." Most people would be inclined to agree. Add this and you get a very different outcome: "Publishing kiddie porn is just fine. Anyone should be allowed to legally post others' credit card numbers to the Internet. There should be no censorship of libel and slander either." Doesn't sound so appealing anymore does it? Note that even with a libertarian bias, it is unlikely that slander, libel, or thievery would be supported by the creators of this chart or quiz.