http://www.merriam-webster.com/dictionary/headline
<em>"1</em>
<em>: words set at the head of a passage or page to introduce or categorize</em>
<em>2</em>
<em>a : a head of a newspaper story or article usually printed in large type and giving the gist of the story or article that follows</em>
<em>b plural : front-page news <the scandal made headlines>"

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</em>"Headline" is usually a title of an article in a newspaper.

When you say 'title', you often mean a name - something with which one can refer to a particular work. It makes you think about function.

On the other hand 'headline' can be understood literally: a line written at the top of something with large letters. It is rather appearance than function.

No wonder that for newspaper articles people use a different word so often:
Headlines of newspaper articles have a specific function:
- they are rarely used to refer to the articles(!)
- there are lots of them on a single page,
- they can be long,
- they are sometimes just a part of the text (first phrase of it or a part of the first phrase)(!)
- they often give you information on the subject of an article
- they always meant to sraw attention (again, there are lots of titles on a single page...)
- and sometimes the letters used are really large)
<em></em>

<em>- </em>and there exist a distinctive culture around news  much different from literary culture in general. Visual appearance and layout is much important here. Sf. 'made headlines' in the dictionry entry above.<em>

</em>That's the way how I understand the logic:) But i'm not a native-speaker.<em>
</em>

A title could be the name/title of a book, movie, poem, song, article or a position (i.e., job title). While I would associate headline with the top news or article in a magazine or a newspaper.

If speaking about articles, here is a good example:

Japan town beats world snowman record - THIS IS THE TITLE OF THE ARTICLE 

Residents of a Japanese town have broken the world speed record for building snowmen. - THIS IS THE HEADLINE

A book usually has a TITLE. 

However, both words have a number of meanings.