How common are chocolate allergies for a toddler?  have you heard of people being allergic to chocolate?

Traces of peanuts. Watch for labels that say "contains traces of peanut", "may contain traces of peanut", "made on shared equipment with peanut" & "made in a plant where peanuts are processed". There's a 10% chance of measurable peanut in any of these situations - sometimes enough to trigger reaction in an allergic person. Hazelnut (aka filbert) & almond are often found in chocolate especially european chocolates.
Possible, but.... True chocolate allergy is rare - usually it is a reaction to another ingredent (peanuts, soy, dairy). Definitely wait until your child is over 1 year old before trying any chocolate, and then cautiously if you have a family history of allergies to any of these ingredients. As with any food type, introducing individual food ingredients is better at first.
Very rare. True life threatening hives and anaphylaxis to chocolate is very rare. Chocolate is often blamed as the trigger when a child eats a food containing milk, nuts, wheat, or other more common allergenic foods. If your child apparently reacts to chocolate, get the ingredient list and review it with your allergist to discover any hidden, more common allergens.
Uncommon. In my experience chocolate is not a common cause of food allergies..I think it is overplayed in the media. However, a good history and skin test by an allergist can usually make the diagnosis for you. If you are suspicious of any food allergy( ie., your child has had symptoms after eating a food), it is safest to avoid the item(s) until you see an allergist.
Uncommon but... It is possible to be allergic to virtually any food but some foods are much more commonly allergenic than others; chocolate is a relatively rare allergen. But as my colleagues mention, chocolate is usually combined with other ingredients that are more commonly allergenic, especially milk & soy lecithin. Some are allergic to sugar & chocolate may have traces of nuts, so a reaction may be to those.