I just bought a motorcycle in Punta Arenas from another American. He had the original Alaskan title with him, while I am a Pennsylvania resident. We had to do the following steps:

1. Go to a notary (the one with all the plants on the first and second floor near the central square is the best one, as some others did not have the correct paperwork) and get a notarized bill of sale. This required the title, both of our passports, and his TIP. A few signatures, some thumbprints, and 5,000 CLP later, we were out the door.

2. Go to the aduana in the Zona Franca (it's actually ACROSS from the main shopping area, so to your right at the big roundabout by the port as you're leaving the city towards the airport) with the notarized bill of sale, TIP, title, and passports. I filled out the back of the title as the buyer and they canceled the seller's TIP and stamped his immigration papers so that he can leave the country and printed out a new TIP in my name. They also provided another document showing that I am indeed the owner of the motorcycle. I am now cleared to be in Chile for up to 90 days and enter other South American countries.

Note that I have NOT yet gotten a new, Pennsylvania title. This will not matter for S. America, but I obviously couldn't cross into the USA with the old plates and title. I wanted to get a PA title and plate before I flew down to meet the seller, but they required a rubbing of the VIN. I will fly back to PA from Lima in a couple months and take a rubbing at that point and get a new PA title and plate and fly back to continue my trip... so at that point, everything will be in my name and I can legally cross back into the US.

From what we were told at the special aduana, this is probably NOT something you can do outside of the Zona Franca. I'm also unsure of the process for non-US passports. Just like Rubin86, I'm not here to argue or debate about the legality of this process, specifically from the point of view of the American DMV. But we were told by the aduana officers that this is fine for South America for all border crossings, etc. Tomorrow I will cross the Argentinean border after purchasing insurance in Punta Arenas and I'll update you when I've changed countries.