Ancud

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Ancud is the first town most people hit when visiting Chiloe Island from Puerto Montt. It's a relatively nice town with a port and the usual small town attractions. The bus from Puerto Montt that crosses over to Chiloe by a ferry is quite economical Bus companies are: Cruz del Sur & Queilen. The best way to get around is to rent a car for a day. You can then explore either the nice beaches to the west of ancud, or drive to Castro. Ask at the local gas station for car rentals.
Hotels
Hostel TerraMar, downtown and up a steep hill. Check the bed before accepting a room - ours was horrendous, sinking in the middle almost to the floor. 5,000 pesos per person (2/06)..
Hostal Lluhay, near the docks at 458 Lord Cochrane Ave. Sits high from the road to provide wonderful views of the quaint city and harbor. Breakfast included. There is internet and a sitting room with a grand piano and traditional decoration. Many lodging options. Inexpensive.
Hostal Mundo Nuevo, Costanera (S. Allende) 748,. A very nice and clean hostel with a views at the sea. they speak english, german and spanish.
Hospedaje Austral, Anibal Pinto 1318,  623847. Cabin-esque single/double rooms with simple breakfast and kitchen is available at request in the owner’s place downstairs. The owners are really lovely(and Principe the dog is quite friendly), and can recommend you good places to visit. It's a bit removed from the center but it’s only 3 houses down from the bus terminal. From 5,000 (single) low season(Mar 2009
 
 
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