Here in Washington it's not too bad. You need a notarized Bill of Sale and then make an appointment w/ the State Patrol to have the VIN inspected and checked against their list of stolen vehicles.
When I did this I saw a small fenced off area with a few vehicles in it. These are the ones that showed up on their stolen list, they get immediately confiscated then and there no matter what kind of paperwork you have. Fortunately mine made it through, and I then was able to get the registration in my name. Then if no claims are made against that VIN for three years you are entitled to a title which you must request - for some reason they don't just send it to you. So a minor PIA, but not really a huge hassle.
If the PO had a legit title in his name but lost it, it's even easier because he's still registered w/ the state. He pays $12 and files an 'Affidavit in Lieu of Title' and if that passes he can then sell it to you nice and clean.