http://www.merriam-webster.com/dictionary/headline
"1
: words set at the head of a passage or page to introduce or categorize
2
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
b plural : front-page news <the scandal made headlines>"

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"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)

- 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.

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

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.