it's not uncommon for people to buy small dirt bikes, especially kid's bikes, and not title them. The reason you need a title is when you want to get a license plate for it. Otherwise, you can go to your local police department or sheriff and ask them to check the VIN to see if it has been reported as stolen. Go look in the dual sport forum, I think there has been a lot of discussion on how to get a title for a non-titled bike, if you really want to get it titled. I do think you should pay a little less for a bike without a title, because it requires you to do more homework to make sure it's not stolen.
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Hoop
2006 XR650R, the dual sport bike
2004 DL1000, the street bike