I did my xr400 using a title bond (AKA Surety Bond), but in my case I had the original MSO - maybe it helped but probably not. Since it was from another state and was in someone else's name (the guy before the one I bought it from), the DMV lady said this was not helping my situation. She said I need to go get a "Surety Bond".
I submitted it to DMV anyway along with the bond and the other paperwork required.
What's the other paperwork you ask?
If you do not have a title you will need:1) Form
VTR-301 - this one is used to do a pencil tracing of the frame vin.
2) Form
VTR-270 - can be used as an alternate if VTR-301 can not be used. ( I think 301 is better since it is a tracing. Your bonding agent will need this to be added in the surety bond paperwork that you take to DMV).
3) Form
VTR-470 - Safety statement, when you get your inspection ask for the green sheet (they are actually no longer green) but the inspector should know that you will need an "out of state" inspection. ALSO - Have him also sign
VTR-470 and you will have no problem at the DMV regardless which DMV you go to. Some will tell you all you need is a green sheet, yes at some DMV but if you include the 470 then it work at "ALL" DMV locations, - it's free, - use it! Inspections stations vary a lot! find a friendly one! If your Inspector is a "go by the book guy" your going to need DOT tires, and the rest of the stuff I'm listing later down this post. Ask around with the TON guys near you for friendly station.
4) Form
VTR-40 - Odometer statement basically just right in a number and be sure to check box 2 that says "Odometer reading is not actual mileage' since its a dirt bike with a resettable odometer.
5) Form
VTR-130-SB - This one you will have to get from the Bonding Insurance Agent (pick one) it's going to cost you $150.00 pretty much everywhere I've checked. Yellow pages under "Surety Bonds" or "Bonds - Surety".
6) Form-
VTR-130-U You can down load this one and fill it out your self or you can stand in line and let the DMV hand it to you then be sent off to the side of the line while they help the next person in line and you fill it out there and wait some more until they get back to you. (If you don't like hanging out at DMV bring it already filled out so you don't get bumped out of line.)
Usually the hard part is getting your inspection done. For me that was easy, this guy never looked for DOT tires. He ask about blinkers but I was ready and showed him that Texas doesn't require them (Can you say - Custom Harley? Chopper shops all over Texas build them with out blinkers) Texans are very lucky. Thank God we don't have the same laws as California! There are some links below for more on this. But if he looks in the official book that all inspectors will have, all it will say is:
Hi/Lo Beam, Stop light and tail light, Horn (i used a 9v "
Mega Horn " - I found one at local bicycle shop)- same as sold by Baja Designs, I have no battery on bike (all the horns I tried would not work on the a/c provided from stator),
Mirror (again I use the smallest bicycle one I could find), It also says a
License Plate light (clear part in tail light lens) although I didn't have that, I modified stock XR tail light to add brake light (it has an 1157 dual element bulb already you just need to solder another wire on the socket and run it through the rear brake switch), he never ask about clear part. You can get all the brake light stuff for your XR from
www.BajaDesigns.com or
http://www.procycle.us/main/dskit.htm both friendly places to shop that provide great telephone support help.
Again if inspector gives you trouble, go down the road to another inspector, but don't go to your motorcycle dealer unless your all up to par. They will surely know to look for DOT tires. (not that I advocate using full-on knobbies) Yea right!

But in case you were not planning on buying new tires, go to your local neighborhood auto repair shop for the inspection. Or ask other D/S riders in your area for names of friendly inspection stations.
One more tid-bit: Since some time in 2006 the DMV will now use the NADA value for your tax base for a new registration. It doesn't matter what your bill of sale says. I had to pay taxes on 1300.00 value for a 96 XR400 even though I had a bill of sale for 500 (even notarized). The only other way around this is to have a letter from a "state recognized" vehicle appraiser (key work State Recognized) stating the value is other than the NADA. Problem is the inspection costs @ 100-500 dollars is more than the taxes for anything valued under 5 grand. So for your XR400 be ready to shell out another 150 bucks to DMV.
Total cost for me was just over 300 which includes 150 for the surety bond. That is the additional value of getting a good clean Texas title when buying a used dirt bike if you ever plan to plate it. Plus about a day of your time running around getting the surety bond.
Good luck: Let us know how it works out
Here are a couple other links that helped me.
http://www.dot.state.tx.us/forms/vehicle_titles.htm <-- on-line VTR forms
http://www.txdps.state.tx.us/msb/mcintexas.htm <-- DOT motorcycle requirements
http://www.txdps.state.tx.us/msb/txmclaws.htm <-- Other DOT info registration and license requirments
http://www.lawrenceautotitle.com/FAQ1.htm <-- good site with info on title bonds (Although I didn't use this company they have a good FAQ page)