As apparent from the desperate need for title insurance, in a system of deed registration of title, such as existent in the United States, the registration of a deed does not of itself cure any defects in the title.
In 1858, Sir Robert Torrens devised a system of land title registration by adapting to land titles, the custom used in shipping registration at the time.

The tedious retrospective search of title back to a Crown grant was disposed of in favor of a mandatory (and to some extent fictional) surrender of land back to the Crown, and an immediate re-grant to the party intended for receipt of the title.

The principle of nemo dat quod non habet (ie a person cannot convey an interest the he does not have) was not given consideration as each purchaser’s title on receipt from the Crown re-grant was indefeasible. One document, called a folio record, described all the transactions for each parcel of land and was held with the Registrar General.

Each parcel of land is given a distinct reference number, and this number is quoted in all dealing with the land, particularly within the document dedicated to the parcel of land.

The Registrar General issues a Certificate of Title when requested by a qualified holder of an interest in the land, such as the proprietor (i.e. owner), the mortgagee, or another person with an interest in the land, but only if the existing Certificate of Title is surrendered.

Today of course this system is computerized, but recognition is had that the Certificate of Title is merely a copy of the folio from the register.

Registration of dealing is conclusive of the status of that title and all dealings have the force of a deed when registered in the folio. The act that affects the transfer of land is the act of the Registrar General in registering the dealing, and so once this is done, regardless of lack on the party purporting to transfer title, the recipient of title receives an indefeasible title.

The date of registration of dealing, not the date of execution of an instrument, is the criteria determinative of priority with competing claims to land title, and the registration of dealings occur in order of the lodgment of the appropriate forms.

With this, a title cannot be set aside for a defect existing prior to registration, as registration by the Registrar General confers on the recipient an indefeasible title.

Indeed, indefeasibility is the foundation of the Torrens system.
The holder of title holds it free of unregistered interests, but holds it subject to all other entries on the folio except for fraud.

Brutal Indefeasibility of Title

The indefeasibility offered by the Torrens system will not allow a purchaser for good value and in good faith to be dispossessed of his property simply due to the fraud of the vendor who conveyed title fraudulently.

The remedy of those suffering detriment due to this fact of registration lies outside the Torrens registration system, with a personal action against the fraudster, and indicates that those individuals ought to have registered their dealings.

Fees payable at each registration provide an indemnity fund known as the Assurance Fund, where compensation is paid to those that suffer detriment unjustly from the vigor of the Torrens system of indefeasibility.

Applied to title registration along with the device of title insurance that already exists in the United States, the Torrens system would be notoriously successful in avoiding the problems inherent in any system of title registration that is considered in isolation.

Clearly, the Torrens system is not perfect, but has been employed in numerous countries and the State of Iowa is the first American jurisdiction to adopt the system.

Resources:

http://www.femail.com.au/torrenstitle.htm

Overview_of_the_Torrens_Title_System

http://wic003lc.server-web.com/~admin417/index.php?page=torrens-title