She has started to #1 AND #2 on the carpet again, completel ignoring the pee pads put down for her. What do I do?

Momma a few days ago you said she was dragging her bum. This may somehow be related. I would really consider taking her to the vet for a check up.

She has stopped the bum dragging, she actually had eaten a hair, and had to pass it to stop the "itching". She has been messing on the carpet for nearly 4 months now...

Wow, maybe it is a domination issue. Since it is both pee and poo.
She never goes on them anymore or does she sometimes use them?
Are you using the same type and brand?. I know with cats if their litter area is not the same they may go to different spots.

It's the same type and brand that she always gets. She does very rarely. She peed on one today. There are two. One in the living room and one in the dining room. There are changed once soiled. She is the only animal in the house. It's just me and her.

Then I would just start back over from zero and keep her with me so that I could interrupt her when I caught her in the act and pick her up and put her on the pad. If she happens to get one by on you place it on the pad long enough to get the odor on it, so hopefully it will be reinforced where she needs to potty.
I have never pad trained a dog so I really don't have experience in it only what I would try.

I work during the day, so I can't do that all the time. I did think of that, but I was thinking that maybe she would be confused by the inconsistency.

When she was a baby, I trained her by sitting her on the pee pad when she sniffed around and then putting a bird cage top over the pad until she went. Then eventually I didn't have to use the cage. And finally I didn't even have to be present. Now... I don't know what's going on. #2 I can clean up easily (most of the time :O) but the #1 is smelling the place up.

I think she might be too old to respond to the same method. Does anyone have any ideas?

If you don't believe in crate training could you put her in one room with her pad. When you return home and she has poo'd just pick it up lay it on the pad and clean the spot where she went with a cleaner that will get rid of the odor.
I really hope someone comes along with a better answer.

I do too. NO OFFENSE! I can't lock in any room cause she'll bark and I live in an apartment. And she'll tear things up... Plus, she's a chihuahua, very energetic. That's why I let her run around in the living room, kitchen, and dining room.

I am not an expert, but the problem, as I see it, is that you have allowed her to go in the house using the pee pads. And you let her have free run of the house. So, why is she supposed to understand that going here is OK and going there is not? Yes, chihuahuas are hugh energy dogs. But it's really up to you to find a way for her to burn off that energy when you are around to supervise, and to keep her in an area where she can't get away with problem behaviors when you aren't around. She needs to understand that you set the rules, and that she has to follow them. So, obedience classes would probably not be a bad idea. But I would also try to get her off the pads entirely, since I think that they may be confusing her as to what is an acceptable elimination spot and what isn't. A doggie litter box might be better idea, since it is a defined, permanent area for her to use. But getting her used to eliminating outside only would be even better, since that is a very clear boundary.

I am not an expert, but the problem, as I see it, is that you have allowed her to go in the house using the pee pads. And you let her have free run of the house. So, why is she supposed to understand that going here is ok and going there is not? Yes, chihuahuas are hugh energy dogs. But it's really up to you to find a way for her to burn off that energy when you are around to supervise, and to keep her in an area where she can't get away with problem behaviors when you aren't around. She needs to understand that you set the rules, and that she has to follow them. So, obedience classes would probably not be a bad idea. But I would also try to get her off the pads entirely, since I think that they may be confusing her as to what is an acceptable elimination spot and what isn't. A doggie litter box might be better idea, since it is a defined, permanent area for her to use. But getting her used to eliminating outside only would be even better, since that is a very clear boundary.

I will try the litter box. The outside idea isn't possible as I am at work for 8 hours a day, and she is home alone.

She has started to #1 AND #2 on the carpet again, completel ignoring the pee pads put down for her. What do I do?

my pupps use this spray u spray on the pads or the litter box and go evry time good luck:D

I have a feeling she is trying to get your attention. It seems as if she is not too happy with you being gone all the time. I understand there is nothing that you can do about that, as we all have to work in order to pay bills. When you get home from work, pay extra attention to her (not saying you don't already, but more so than ever) and see if she gratually stops. The only reason I am suggesting the idea is because I also have a Chihuahua and can relate :)