Update 5/3/08: SERNAGEOMIN (the Chilean Geologic Survey) is now concerned that the eruption of Chaiten may be a the precursor of a larger eruption, mostly owing to the long (~9,000 year?) repose time. This could be the beginnings of a southern Andean Pinatubo.
The towns around Chaiten are more or less deserted now as the volcano continues to spew ash and pumice – upwards of 15 cm of ash in some places.
Edit: fixed link (thanks Mark)
Edit 2: fixed date of last eruption from ~7,000 years ago to ~9,000 years ago.