Most of the advice here is rock solid, so I'll summarize it/my experience (2nd round, arrived in Nov 2011):
-Work on your Spanish ahead of time. It helps a lot, but you don't NEED it (I knew nothing before coming down).
-Stay in a hostel/hotel for a few days when you get down here in order to find a better place.
-Bring down at least $10K. It took me two months to get my first reimbursement and I was running pretty low by then.
-Accept that at least one full day a month will be wasted on bureaucracy (reimbursements & mandatory presentations to locals)
-Don't expect to get high quality talent here that speaks English fluently. Those that have found talent are far outnumbered by those that haven't (technical & business).
-Don't expect to have strong mentorship like 500, YC or TechStars. It's all peer mentorship.
-Realize that the strength of the program is the international component. There's a lot of market opps in Latinamerica that a lot of people have no idea about. It's also rare to have such an global composition of entrepreneurs.
It's not perfect for everyone, but if you're:
-pre product/market fit
-interested in international markets
-cool with trading some time wasted with bureaucracy for equity free funding
5k is just enough per team member, but not per team. I write this based on our recent experience; Our team of three arrived about two weeks ago to participate in the Startup Chile program. My suggestion is that your Startup Chile team needs to have 2 months of up-front expenses covered as it takes time to get the reimbursement process started. Between travel insurance, flights, apartment rental ( guarantee, deposit, two-months payment ), dining out and getting to know Santiago, bureaucratic payments ( such as the $470 USD immigration payment at the airport of US citizens upon arrival ), Visa application payments etc. You will be reimbursed for all of these expenses but combined together all within two months they are considerable.
We are enjoying very much participating in the program so far. It truly is the deal of a lifetime. The atmosphere is great and the impact it is having on Chile is becoming visible. Santiago is a great city with a higher quality of life than many cities in North America or Europe today. We are honored to participate in Startup Chile and I can already suggest it without reservation to any serious entrepreneur.