I donated my non-running '93 Escort last November to charity. I left the title in the glove box and they picked the car up. Around February, I got a notice from the police saying that the car was impounded and that I had to go to court. It turns out that someone got the car started and it was ticketed for having an "improper" registration. Long story short, the judge told me to get the car title revoked (I mistakenly thought that signing the back of the title was sufficient) and bring in verification on June 5th.
Even with all of this hassle, I think that donating vehicles is an excellent way to help organizations (in addition to getting a much needed tax write-off in return) and now that I know exactly what to do to protect myself, I would not hesitate to make another donation.