thanks to tomongolia for information!

Mongolia is the last heaven frontier for motorcycle addicts.
The vast steppe, desert terrain, snow caped mountains, lakes, almost no paved roads and friendly nomads,
make it one of the most exciting off road countries to travel through.

The challenges
Mongolia is not a country to develop your riding skills.
Unlike western countries there is little to none suitable infrastructure for motorcyclists.
You should be an experienced off road biker, have some knowledge of fixing and maintaining bikes in the field.
There are no decent maps and no road signs, so you should have good navigation skills.
Finally you should have the proper attitude in case things go wrong, the Mongolian environment is unforgiving.

All these challanges make Mongolia the most exciting country for cross country motorbike tours.
Here are your options.

The Tour option
There are a few tour operators offering motorcycle tours.
These tours are well organised. They come with guides, cooks, and most important a support vehicles.
You will get to meet other enthusiastic bikers.
The tour option makes it possible for less experienced bikers to enjoy the trip.

Your bike
For those bikers doing the cross Asia route, Mongolia is just one country on the route.
It is a straight forward procedure to enter Mongolia with your bike, as long as your bike paper documentation are in order. There is no need for a "Carnet" (special passport like document for vehicles). There are no limitation on where you may ride in Mongolia. You are not required to obtain a local driver licence as long as you have an International driver licence from you home country.
If there is a long line of vehicles at the border crossing, it might take a long day to get through, the process is slow.

Renting a motorcycle
There are very few bikes to rent, the price is about $130 per day, this is a reasonable option for short rides only.
Some bike sellers will rent for less for about $30 per day, if you place a deposit of the full price of bike.

Buying a motorcycle (2011)

Not an easy option, and in some cases may end up as an expensive adventure.
Few riders follow this option.
Price: the lowest you can get a decent bike is for $900. Average would be around $1200 - $1500. You may try a used bike for less, but than you should be able to check it yourself before buying.
Models: The most common is the Russian IZH Planeta 5s. The Planeta (in the picture) is a 350cc, single-cylinder, 2-stroke with kick-start and a “rocker” gearshift. The advantage of the Planeta is that where ever you go, you will fined the local guy with spare parts and know how.
There are Japanese bikes of better quality you may consider, like Yamaha and Honda. The new Chinese models are the cheapest, but they are useful for city trips only.
Accessories: Bring with you what ever you have. You can fined everything in Mongolia, but it is time consuming.
Selling: You have the disadvantage of being in a rush to sell before you have to leave.
The only option is to sell for half price or less of what it cost you.
Markets: There are only a handfull of bikes at any given time on the UB market. There are 2 markets in UB selling motorcycles Shar Khad's Tsahlai, known as the Car market and Uguumur market
Translator: Only few sellers in the market can speak a few English words. Ask your guest house to arrange a translator to join you.

Bike Registration procedures at the police station
1 Bring your passport and driver licenses
2 Pay 15,000 Togrog registration fee
3 Pay 700 Togrog for registration ID
4 Present proof / contract of selling/ buying of bike
5 Present motorcycle import customs documents
6. Present motorcycle original registration documents
7. The seller and buyer have to come together to the police station to register

Petrol
Cost: about 1,000MNT8price 2011) per liter (lest than $1)
Stations: they are not obvious, ask around for Benzene (local term for petrol), in most cases it is just a pump on the road side.

Distances from Ulaanbaatar:
To the south - to China about 750Km (only about a third of the road is paved)
To the north - to Russia about 350Km (Paved through, parts of the road need repairs)
To the west - to the Altai mountains about 1100Km (most of the road is not paved)

Travel insurance: Make sure your travel insurance covers riding motorcycles.
(Some free travel insurance provided by credit cards companies do not cover self driving)