Just discovered this great site a couple of days ago and have some questions.
I am travelling to Chile, 2 adults and 2 kids (4 and 6 years) from mid january 2010 for about 6 weeks. We are renting a car for most of our stay and are (among other plans) thinking about driving down south (our current plans takes us to Puerto Montt) either to Punta Arenas/Torres del Paine or maybe driving down Carretera Austral to visit some of the nature parks/experience the landscape there.
My main question is about car rental. I am planning on renting a Toyota Yaris sedan/Corolla type which will be the most comfortable (and economic) for most of our trip. But is it ok to drive on the CA or to Punta Arenas in this car.(I realize that a jeep/pickup type would be optimal, but is it possible in a "normal" car or is it mission impossible (insane

How about driving on CA. I have read that roads are closed near Chaiten due to the volcanic outbreak in 2008, is that still the case?
Any general thoughts about driving/staying so far south: safety/security, preparations etc.?
We plan on using maximum 2 weeks for this part of the trip: is that ok for both ideas or is Punta Arenas to far away (what is a realistic time to go from Puerto Montt to Punta Arenas by car?)
Finally: We are not really hiking/"camping in tent" types. We generally prefer staying in cabanas/B&b/hotels. Will that work/be possible or do we have to get a tent etc. as backup (we usually dont make reservations in advance, but will if necessary)