I recently read the POH for a M20V, the advertising for this aircraft states that the top speed is 242 KIAS. The POH gives the Vne at 196/195 KCAL/KIAS. I have found a similar discrepancy, the Vl3 (light sport aircraft) mentions the aircraft has a Vne of 165 KIAS, yet one of the engine choices gives the plane a max cruise speed of 195. I find these numbers confusing can anyone shed a light on this?
The reason is that cruise speeds are usually given in TAS (True AirSpeed) rather than IAS (Indicated AirSpeed) or CAS (Calibrated AirSpeed). See e.g. this answer for details on what these speeds are.
Have a look at the following plot showing TAS as a function of altitude for the two Vne speeds you gave (assuming ISA conditions):
You can see that the claimed cruise speeds are achievable above 14,000 ft for the M20 and above 11,000 ft for the VL3 without exceeding Vne.
You said that advertisement for the M20V claimed a top speed of 242 KIAS, but I think that is a mistake. It should be KTAS, not KIAS. Wikipedia also claims:
Cruise speed: 242 kn (278 mph, 448 km/h) (TAS)