I bought a 68 coupe from a Navy guy (I guess you'd call him a sailor) who had the car registered in NY. NY didn't title the car, there was a spot right on the back of the registration for transferring ownership.
When I went to title and register the car in VA, the DMV gave me a hard time not because of the NY registration, there was a form for that (because of no title), but they had a problem with the sale of a vehicle in VA that wasn't titled in VA. So according to the VA DMV, the seller should have titled his car in VA and then sold it to me. I tried explaining that he was military and didn't have to title the car in VA, and they didn't seem to care. I don't recall exactly how I got around it, but I'm pretty sure I went back a couple days later and talked to a different clerk at the DMV with the "no title" form and that person accepted it.