Castro is the capital of Chiloe Island. It is located on the island's eastern coast, halfway between Ancud in the north and Quellon in the south, and is a convenient base for exploring the island of Chiloe. The tourist information is located on the town square in front of the church. 
There are two bus terminals in Castro. The main bus terminal (actually the terminal of the Cruz del Sur company) is at the intersection of Sotomayor and San Martín, just one block north of the northeast corner of the main plaza. Here you can find frequent connections to Puerto Montt (about 2 hours, 6,200 CLP) on the mainland, as well as Quellon in the south of Chiloé (2 hours, 2,000 CLP). There are several buses a day to Santiago (16 hours, usually overnight) as well as most major cities on the way. To Argentina, buses to Bariloche depart on Wednesdays and Sundays, but you need to change buses in Puerto Montt (12 hours, 6,200+13,000 CLP). All of these buses stop in Ancud on the way, and the ferry crossing is included in the price. Prices are as of Oct 2014.
You can find local buses (micros) at the Terminal Municipal, located a few blocks away from the main bus terminal at San Martin and Aldea. Buses to Dalcahue (1 hour), Achao, and Chonchi stop here. The bus to the Chiloe National Park stops here as well; there are several companies leaving at different times of the day.
The tourist office in the main plaza is quite helpful and can furnish you with a map of Castro which has a suggested walking tour on it. The tour takes 2-3 hours depending on your pace. The tourist office is open daily 9am-6pm.
Palafitos. Castro is known for its collection of wooden houses on stilts. There can be found in several places. There is a long line of them along the eastern coast, north of the Plazuela del Tren (just north of the Mirador Costanera). These are the Palafitos Montt, and are best seen from the water; you can find tour boats near the port. There is another viewing point at the northern end of the Palafitos Montt which does not require you to take a boat. Finally, you can see a different row of palafitos from the Plazuela Henriquez at the southwest corner of Castro.edit
Housing in Castro
Iglesia San Francisco, (right on the main plaza). free. edit
Plazuela del Tren, (Just north of the port). A small plaza right by the waterfront with an odd collection of old trains. There are also a few of these trains by the Feria Artesanal Lillo.edit
Cementerio Parroquial, (Entrance off Riffart, by the athletic field). Some of the tombs here are quite grand and ornately decorated. It is actually a pleasant place for a stroll.Free. edit
Feria Campesina Yumbel, (At the intersection of Alcalde Manuel Muñoz and Yumbel, northwest of the hospital). A bustling fruits and vegetables market. There are also household goods and fish stalls here.edit
Most of the restaurants and cafes in Castro are concentrated along the Calle Blanco, running from the southern end of the plaza down to the waterfront.
Café Blanco, Blanco 268 (half a block east on the southern side of Plaza de Armas), ☎ (65)2534636 (email@example.com). A cozy little French style café with a tremendous selection of coffees and teas. Generous portions of delicious cakes, sandwiches and small meals are served. Locals come here for their afternoon once (snack). Wine and liquors also available. Coffee from 1,000-2,000 CLP, cakes 2,000 CLP, sandwiches 4,000 CLP. edit
There are tons of lodging options in Castro, so you should have no problem finding a place to stay by just walking around and asking.
Palafito Hostal, Calle Ernesto Riquelme 1210, ☎ 56/65 531008, . The hostel is situated in one of the traditional quaters, the “Palafitos de Gamboa”, where the houses have a typical construction of wood on the waterline. edit
Hospedaje El Mirador, Barros Arana 127 (exiting the terminal Cruz del Sur, walk one block and a half straight ahead (east) and go down the stairs), ☎ 065 633 795. Convenient location but a bit protected from the bustle of downtown. Easy walk from Cruz del Sur bus station. Very clean, economical, nice basic breakfast. Some rooms with bay views.edit
This is a usable article. It has information for getting in as well as some complete entries for restaurants and hotels. An adventurous person could use this article, but please plunge forward and help it grow!