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If you plan to hitch in Mongolia, it is good to know that most drivers expect to be paid, though you can still hitch for free. It just takes more patience, and effort, but the rides come relatively quickly, nonetheless.
Before entering the car make it clear that you have no money, unless you don't mind shelling out a few bucks for every ride. Many will just turn forward and continue driving, leaving you in the dust, but many will say not to worry about it, and motion for you to get in anyway. Also expect a jam-packed car, packed with amazingly friendly people! Expect flat tires, overheating jeeps and not much more than 100km a day, due to the lack of traffic, and extremely poor condition of the roads. The easiest place to find rides in small towns is in the local markets, where locals look for shared rides and trucks are picking up and delivering supplies, though there, you will probably have to pay. Otherwise just stand by the road anywhere (even in the middle of absolute desolation) and stick out your thumb when a vehicle comes by. The classical hitchhiking method works just fine, though they don't always know that you mean you want a free ride, so they will usually ask you up front for money, by rubbing their fingers and thumb together and saying "money, money" or "dengi, dengi" (Russian for money), but you should still make sure, before you get in the car, by saying "nye dengi" ("no money" in Russian). However, if you get too bored, or worried that you might not get a ride before dark, you can always just madly wave down whoever is passing. They will stop (no need for a sign), though they will probably expect money when you do it like that. Asking the locals is also a good way to get information on rides and routes, if you can find a local that speaks English. Be warned you probably won't be able to leave before endless cups of tea and milk cookies.
Hitchhiking in the far west: Bayan-Ölgii, is very hard to hitch. It took Worldhitch 2 weeks from the Russian border in Bayan-Ölgii to Ulaanbaatar. Getting a Chinese visa is easy in Ulaanbaatar, Russian is not so easy – like in any other place.
Most Mongolians, in the south, don't speak English, and only have the slightest understanding of Russian, but you can get along with hand gestures and correct pronunciation of the name of the place you are trying to get to (if you know how to pronounce it correctly).
Mongolia... the land of dusty, unpaved, unmaintained, "roads", in absolutely the worst shape, that this hitchhiker has ever seen (though I've only been to North America, Europe, Russia, and Northern Asia). Also, or maybe because of that, there is next to no traffic on the major thoroughfare across the southern part of the country. People are mostly, quite willing to pick you up, but there just aren't that many people. Walking sometimes staves off the boredom of just sitting and waiting. There are just a couple hundred km of paved road from Ulaanbaatar in every geographical directions (exactly one per direction) and that's it. No roads, no signs. The trunk roads out of Ulaanbaatar are paved and reasonably trafficked. Be careful if you walk out of the cities, along the roads so you don't get lost, and take water with you. Confusingly, names of cities equal names of states, so make sure city and state match.
Hitchhiking from Ulaanbaatar to Zamyn Yyd (Chinese border) is not too difficult. The road (half of the way down is paved) stays close to the Transmongolian Railway and gives you the security not to die of thirst. Worldhitch also got a lift by the great Defektoskop train.
After crossing the Mongolian-Chinese border, you will be in a small Mongolian city/village. Most people take the train to go to Ulaanbaatar. But tickets might be sold out. Corrod3 asked around the train station and found a driver, who was looking for passenger without train ticket to take to Ulaanbaatar to fill-up his car. But he asked for some fuel money. There is not much traffic at all and if you don't find a ride immediately, it might take one or two days. Paveled road will end at the exit of the town and until Choir people just drive through the desert. Expect to be offered a glass of vodka to cheer on good luck for your travel. From Choir there will be some paveled road until Ulaanbaatar. It's recommendable to take only a ride, which goes at least until choir, otherwise you mind end up in the middle of Gobi without anyone around.
Camping is great in Mongolia. It's legal to camp anywhere. You can filter water from springs and lakes, or ask any of the locals for some of their boiled water. It's a good idea to stock up on fruit, vegetables and any essentials in Ulaanbaatar.