In America, generally people drink coffee rather than tea. I actually like tea better, though I do occasionally drink coffee.
Chai is very different drink than than the regular tea that is more common in America. In America I drank steeped tea with just sugar, whereas here the patti(tea leaves) are boiled with lots of milk and sugar. It is a little stronger than my normal method, but very tasty. Some people add different masaley(spices) to their chai, sometimes elichi(green cardamom) or loung(cloves), but that depends on each family and their preference.
Many people drink chai 3-4 times in a day. It is almost always served with breakfast, and then sometimes after lunch and dinner, and usually in the late afternoon/early evening around the time of maghrib(sunset prayer). If anyone is feeling unwell in our family chai is one of the first things everyone suggests.
Chai is often served to guests in Pakistani homes. People here are very hospitable. Usually when we visit someone's home, after all the greetings and a little chatting chai is served. Though it does depend on the time and the weather, if it is hot out then guests are usually served chilled juice.(like Rooh Afza, Tang or some soda)
Some people serve chai after the wedding dinner or the valima(reception) dinner. Many weddings that we have gone to in the cold season have served a simple "Kashmiri chai", which has some ground almonds and other things.
There are many little stalls with "chai waley"(tea sellers), mostly these are for men and women or families go to a more restaurant style place with a separate families section. There are also Chai waley in the market when we go, men who walk through the market with a large basket full of little cups, and a big thermos that has a pump dispenser on the top, this is mostly for the shop keepers so they don't have to leave their shop alone.