Quellón is a small town at the southern end of Chiloé Island. It is a fishing and transportation hub for the area and not a particularly interesting tourist destination.
Taxis are 900 pesos (as of 2/06) regardless of destination in town. At night the price is higher
A plaque marking the end of the Panamerican Highway is just outside of town at Punta de Lapas (also a relatively good beach for this far south). Take any bus on Ladrilleros that says Punta Lapas - 20 minutes and 250 pesos.
Every day during the summer an authentic curanto takes place at the Turismo Millaguen near the end of the Panamerican Highway (Km 3, email email@example.com). Take any westbound bus on the main street that has "Punto de Lapa" as a destination - Millaguen is on the north side of the road down a steep driveway.
The curanto is at 1:30 (the excitement starts about 12:30 when the fire gets going - watching the construction of the curanto is as much fun as eating it). Seafood, chicken, sausage, pork, and fava beans are buried in a pit and cooked for half an hour. Lunch with wine costs abour 4,500 pesos (2/06).
Hotel Tierra del Fuego has a very nice restaurant that serves excellent fish dinners. Right on the waterfront at Pedro Montt 445.
Be sure to stop at Kaffee Rose (Ladrilleros 135, next to the Coloso Supermercado) for great pastries and the usual Nescafe.