Not too long ago, Chile was far south of most people's vacation radar. This long, bony finger of a country is a long way away - it stretches more than 2,600 miles from the Atacama Desert all the way down to the icebergs of Antarctica. Though a colorful and fascinating destination, most of what people heard was about its murderous military government. Memo to budget travelers: Put it back on your itinerary. Augusto Pinochet's regime is history and he's spent most of the last year and a half under arrest in London, pending trial in Spain. Meanwhile, Chile has returned to democratic peace and prosperity, its most recent elections held just this past January. It's a safe destination that not only offers some of the most compelling sights but also some of the cheapest prices on the South American continent.

Consider that you can spend a night in Santiago, the sprawling, cosmopolitan capital of nearly 6 million people, for $5 to $15, if you don't require the Ritz. You can gorge on tasty empanadas for less than a Big Mac costs back home. And you can take advantage of South America's flip-flopped seasons: Dig your feet into the white sand and surf of the palm-tree-studded resort city of Vina del Mar when people are shoveling snow back home, or carve up the white powder at renowned ski slopes like Portillo and Valle Nevado when it's sweltering in the States.

First-time visitors will want to spend a few days looking around the museums, monuments, and gracious European-style precincts of Santiago, then, during the summer (December to February), grab a bus to Vina del Mar to wander the beaches and try their luck in a casino for several more days. Those interested in exploring farther afield might consider visiting the glaciers, penguins, and spectacular wilds of Patagonia in the south or the shimmering Atacama Desert in the north.

Chileans like visitors, and they like it when you try speaking Spanish - even if you do it badly. "People from Chile are very warm," says Alejandra Oyarzun, a resident of the island of Chiloe. Despite a prospering economy, the exchange rate favors gringo guests. The U.S. dollar recently sold for some 520 pesos, up from 410 in 1997.

Coming down, going around

While not the cheapest ticket on earth, airfare to Chile is well within the budget traveler's reach. Airline ticket discounters or consolidators that specialize in South America travel offer reasonable prices in peak summer season, December to February. Round-trip flights from New York City cost between $615 and $660; while Los Angeles is only slightly more expensive at around $700. Travelers from Miami get even better rates, around $450. (These prices do not include taxes, which run from $30 to $64. Also, Chile charges U.S. citizens a onetime entrance fee of $45.) Some of the best fares are available from consolidators like World Trade Travel in New York (800/732-7386), Ticketplanet.com in San Francisco (800/799-8888), and Cheap Tickets (800/377-1000). Or fly as a courier; the Air Courier Association (800/282-1202) offers $450 flights to Santiago from Miami.

Once you're here, local carrier LanChile (800/735-5526; www.lanchile.com) offers an air pass-$350 for three domestic flights ($250 if you fly LanChile from the U.S.) - allowing visitors to check out Santiago and environs, bounce north to the fascinating Atacama, and scoot south to Puerto Montt, in the heart of the gorgeous lake district.

Buses are also a popular option. There are dozens of companies that run clean and comfortable vehicles on regular timetables. Buses leave hourly from Santiago to popular destinations like Vina del Mar (the two-hour trip goes for $3.18 each way) and La Serena. Advance booking is suggested only on holidays or for longer trips on a sleeper bus. Among the major companies are Pullman (2/235-8142), Cruz del Sur (2/779-0607), Flota Barrios (2/776-0665), and Tur-Bus (2/776-3690).

Buenas noches

The country is packed with budget accommodations, though options range from a plain room in a local home to posh five-star hotels. Hospedajes and residenciales are the best bargains, with simple digs and shared bathrooms at prices that generally range between $5 and $20 per person. Common in small towns, hospedajes ("oh-speh-DAH-hess") are homes that rent out rooms. Larger cities are more likely to have residenciales, essentially boarding houses with individual rooms and shared baths. Rooms tend to be austere - sometimes with just a couple of twin beds and space to drop your bags - but the beds are comfortable, and some places have communal kitchens. It's perfectly okay to ask to see the room first, and if it's not up to your standards - some are more run-down than others - move on; there are usually plenty of choices. Hospedajes and some residenciales offer a glimpse of how people live and, if you speak Spanish, a chance to discuss Chile with your hosts.

A good word to keep in mind when planning your trip is Sernatur, the country's official tourism office (in Santiago, 2/236-1420). It issues a number of free booklets and maps-including some in English-on sights, rooms, restaurants, and special-interest activities like skiing; some staff hablan ingles, as well. Sernatur also runs an information booth near Santiago airport customs, open 9 a.m.-9 p.m. weekdays, 9 a.m.-5:30 p.m. weekends. Also, there are plenty of taxi drivers in the terminal willing to help book you into a place in exchange for a tip (usually 10 percent of the fare). In Vina del Mar, the tourist office hands out a map at the bus station that lists dozens of hotels, residenciales, and restaurants, and some of the staff speak English. In many tourist-oriented towns like Puerto Montt and Punta Arenas, visitors getting off buses are handed business cards advertising budget lodging. In many cases, the card-giver is the owner of the hospedaje and will personally escort you to the lodging.

At the low end of the scale in Santiago is the Hotel Olicar (Calle San Pablo, 1265; no phone), a sprawling residencial with a winding staircase and balcony windows. Popular among footloose Israelis, its rooms have a bit of peeling paint and some are windowless, but they are a bargain at $4.70 per person. Kitchen facilities are also available. For something homier, try Residencial del Norte (Calle Catedral, 2207; 2/695-1876), which charges $10 per person with a shared bathroom. Residencial Tabita (Calle Principe de Gales, 81; 2/671-5700) has the advantage of being both centrally located and quiet, in a cul-de-sac away from traffic. Rooms are plain but the beds are firm; it's $13 per person for shared bath, $24 to $31 for private bath.