It's always pronounced with a KJ-sound that you don't really have in English. And it's known for being a very difficult sound for learners of Norwegian to get the hang of. A lot of foreigners have problems with distunguishing between KJ and SH:
I'm not entirely sure how to pronounce the german ich, but I found this video which might explain: http://www.youtube.com/watch?v=Cqbt4mM3avQ&list=PL635_3JoR4Ac8x4iv9O0Qk4qrkIrbcZgb
Either way: Kylling never has a hard "K".
Oh, English has it alright. The thing is that it's an allophone of /h/. It pops up in words like 'human' (with the full palatal glide) and 'hunt' (without palatalisation). Which makes it all the funnier when it appears in another language and people claim to be unable to make it!
Good point! I didn't even consider the possibility of English having that sound, as so many people from English speaking countries seem to struggle with it in Norwegian. That's strange, because the beginning of the English word "huge" in this example ( https://www.youtube.com/watch?v=eiy0wDdBto4 ) is a perfect pronunciation of the Norwegian kj-sound.
I might add some extra information for you. In norwegian we have several ch-like sounds, the most common are: skj-, like in skje (spoon) and skjegg (beard) Kj-, as in kjole (dress) and kjede (necklace (if pronounced with skj- it will be the vulva)) K-, as in kino (cinema) and kina (china) Sj-, as in sjokolade (chocolate) and sjokk (shokk) And Tj-, as in tjære (tar).
It is very difficult to get them right, but there's a subtle difference.