Chile - 2 weeks

Hi,
The three main areas of interest in the south are the lake district, the island of Chiloe and Patagonia. Patagonia is amazing for hiking and climbing. You can visit penguin colonies and sometimes icebergs. It's farther and could be better saved for a longer trip. You could probably travel through the lakes, visit some volcanoes (some more active than others), and pretty little towns. The culture there is actually more German influenced than Spanish, and you'll see little swiss Alp style cabins, and find lots of smoked fish and good microbrew beer. A favourite is Pucon -- pretty touristy, but still beautiful and with lots of hiking, rafting, climbing and cycling options. From there you can climb Volcan Villarica with a guide and group. I think it cost about 70 bucks and was more than worth it. It's an intense 4 hour climb up, and a one hour slide-down-the-snow-on-your-butt descent. The volcano is active enough that you might even see red bubbly lava. Panguipulli is smaller and less touristed, but with similar scenery.
After your tour of the lake region, you can end up in Puerto Montt for the ferry over to Chiloe. It's a big island surrounded by smaller ones. It's ripe with legends of trolls, mermaids and ghost ships and they say that an alarming number of the locals still firmly believe them. I loved that place. It's charming. Try the curanto.
If you're staying in hostels or traveling with a friend and sharing rooms, you can probably get away with spending between 10 and 15 dollars a night on accommodations. Maybe a bit less.
Have an awesome trip!