Pub del Sur (Camilo Henríquez 382, tel. 045/413054), a recent addition to the nightlife scene, opens early (around 7 p.m.), stays open late (until around 5 a.m.), and also has live music. Dinners (Valentín Letelier and Pedro Montt) is also popular.
Immediately behind the tourist office, Villarrica [1]’s Feria Artesanal showcases Mapuche crafts and food in summer, but the rest of the year it’s fairly moribund. Tejidos Ray-Ray (Anfión Muñoz 386, tel. 045/412006) is strong on woolens.
Links:
[1] http://www.moon.com/destinations/chile/sur-chico/villarrica