"Qi" is simply "air" in Mandarin Chinese; when one breathes (呼吸, or just 吸), one breathes air (吸氣). It is not at all "life energy", and while a good many fatuous New Agers and cynical fraudsters (Chinese, Japanese, and Occidentals alike) love to pretend differently, it hasn't got the least bit of analogy to "energy" at all. It really is "air", or -- in Fengshui (as it's used here), it is used to refer to "air" as an abstract, inorganic, mystical nutritive that exists within the earth. "Qi" in Chinese is essentially the same concept (and exactly the same written word) as "ki" in Japanese, which is used in "Ai-ki-do" or "Rei-ki".
The key here is "mystical"; New Age books aside, Fengshui in Asia is basically just a hodgepodge of loose superstition, and not much else. Supposed "fengshui masters" are most often charlatans with little or no education in any actual tradition; those who actually do learn a tradition are quite few, and far more conservative in their usage of this term than popular literature and movies would have us believe.
The reason it is spelled "qi" here is because the Hanyu Pinyin romanization of the Chinese word "氣" is being used. In other romanization forms, it has been spelt other ways, most typically "ch'i" and "chi". These other romanizations are, however, inaccurate in their phonological systematization, and so Hanyu Pinyin was developed by Chinese linguists to correct the problem. The reason the "q" is used is for two reasons; first, "ch" represents a phonologically distinct sound in spoken forms of Chinese, and second, Hanyu Pinyin draws as much on the Cyrillic alphabet and phonology as it does the Latin one, and in Russian, "Q" is a sound close to the Mandarin one it represents here.
Because of political reasons, the US has been quite late in adopting the use of Hanyu Pinyin; last i checked, Wade-Giles was still the Library of Congress' official romanization. The rest of the world (excepting Taiwan), however, now uses Hanyu Pinyin as its official system.