What I know about crossing the border at Erlian, is that you absolutely cannot cross on foot. The vehicles at the border when I was there were all private vehicles, some carrying would-be foot passengers, some not. Public buses start the run later in the day.

I can’t see there being any problem with driving over in your own vehicle as long as all the documentation and relevant insurance is in order. I’ve just read on the UK Foreign Office website that you will need an International Driving Licence. It also says “if you are planning to bring a vehicle into Mongolia at any of the border crossings you should inform the tax authorities and border troops in advance,” though I’m pretty sure the latter won’t be necessary.

Also, to continue this real-time research, I’ve just read elsewhere that “to bring a vehicle into Mongolia, it is not necessary to do any preliminary paperwork, however, you do need to get a Temporary Vehicle Import Document and 3rd Party Vehicle Insurance at the border.”

The above can be found at the following link and will tell you far more than I could tell you myself. You could also check out the Lonely Planet travel forums if you haven’t done so already. They are generally pretty helpful for this sort of thing.

http://www.goannatracks.com/Home/Mongolia__Overland_from_China_and_Travelling_Mongolia.html

Cheers,
Paul