Chiloe' is a pictorescque island - I like these colourful houses on poles, just over the water. The place is quite laid back, not too warm nor too cold. Plus, there is these old-looking wooden houses, but quite confortable actually! (the one pictured is in Puerto Montt on the mainland)
Something else to try is the Curanto, a local - heavyweight - dish with seafood and meat.
All in all this is a nice place, on the way to the end of the world.. (to Patagonia)