Las Brujas is a well-established restaurant/discotheque in Santiago that my brother-in-law insisted we visit. Most of my family had heard of it as well. It is a HUGE place with two very large dining rooms, an upstairs dance floor featuring salsa and Latin music, and another dance floor with more contemporary club music. You pay a cover charge to get in (6,000 pesos per person, around $12). If you dine with one of their preset menus, they deduct the cover charge from the bill. It's a good deal, I think.
You get your choice of items within the menu--our menu consisted of an aperitif (Pisco sours), shrimp cocktail, choice of chicken, beef or fish entrée, glass of wine, dessert, and coffee or soda. The food wasn't great, but it was decent.
The Latin dance floor attracted a more well-dressed crowd and people who really came to dance. The other dance floor was a younger casual crowd. This is a place to have fun and cut up the dance floor. It seems like they are not unaccustomed to tourists either. I recommend it, especially if you like to dance.