A very intersting and intriguing intinerary!

I used to live and work in Riga for a while and am now based (again) in Northern Germany, but I still feel the urge to return on a regular basis.
That said, I have never driven all the way. The main reason is that there used to be enormus waiting times at the German/Polish border. This may have changed as Poland has now become a member of the EU. However to my knowledge they are not yet a member country of the Schengen Treaty which likely would eliminate border stops completely.

From experience of acquaintances one also should be on the guard of one's vehicle and valuables when crossing Poland. You should therefore inquire at your rental agency whether they allow you to drive across the border into those territories. Most likely the rental agency will not approve of this.

As I do think it is great to have a car available when exploring the area, I have always taken the overnight (and day) ferry from Germany to Tallinn and back. Others have done the same or at least taken the (less comfortable) route to Klaipeda in Lithuania.

I also hate to keep raining on your parade, but I think that 10 days are a bit tight in covering that area by driving all the way up to Tallinn and back to Berlin.
The Curonian Spit in Lithuania with beach resorts such as Nida and Palanga should be on your list. but it would take you at least a day to get there and in order to appreciate it you should allow for another day.

From what I have heard, Vilnius is rather attractive, too, with a small town atmosphere and charm, but is much further inland.

Riga with its welll preserved and restored Old Town and the bordering Art Deco district is a gem. You should allow at least for 2 full days in order to appreciate it fully.

Tallinn is also rather attractive. Although not that far from Riga the drive is likely to take you 4 hours, which is basically half a day of driving. On the way there is Estonia's summer capital called Pärnu, which makes for a nice stop and you could take a refreshing dip in the Baltic Sea at the wide beach and the shallow waters close to the Scandic Ranna Hotell.
Tallinn sports a great Old Town, but is architecturally a bit bland otherwise. Loads of tourists during summer months. You would still need at least one day in the city.

Sigulda, a bit closer to Riga, is makes for a nice excursion and serves as the entrance to the Gauja National Park, but getting there would likely prolong your driving time to Tallinn by 2 hours including just a short stop there.

Driving back to Berlin would at least take two full days and is likely to be quite strenous (and I personally do enjoy driving myself).

Thus, you might want to consider flying into Riga out of Berlin. Latvian Airline AirBaltic is associated with SAS and often offers secure and reasonably priced flights. You could then rent a car and proceed to where you would like to go with less stress, I should think. Take into consideration that roads are not nearly as well developped there as in Germany or other parts of Western Europe with Autobahns and other express motorways. This in general severly prolongs driving times.

If you indeed opt for driving all the way up there, you might want to consider to at least take the ferry on your way back to Germany. Silja Line's Finnjet departs Tallinn and takes you to Rostock in slightly less than 24 hours.

Here are a few links you might find helpful:

For valuable info on the Baltics and Poland:
http://www.inyopurpocket.com

For flights:
http://www.airbaltic.com/public/index.html

For the ferry:
http://www.silja.fi/?ChangeLang=english

Some hints by me on Fodors are available if you click on my screen name and search for 'Riga'. I have posted extensively on the subject and will provide one link here which outlines a small stroll through the city along with some restaurant and lodging remarks:
http://www.fodors.com/forums/pgMessages.jsp?fid=2&start=0&tid=34466066

Should you need any further info, do not hesitate to post here and I'll try to customize some information for you!

Enjoy your trip!
hsv

Thank you so much for this wealth of information. I will be reviewing this material with my traveling group.

Flying or taking a ferry for a portion of the trip may work out very well. The group consists of my girlfriend and her grandparents. They have driven in countless countries throughout the world. They love the flexibility that a car provides. I have traveled throughout Eastern and Western Europe but never driven. This would be my first trip to the Baltics. I am very excited about the possiblities of this trip. I will make sure to investigate rental cars and if they you are able to cross certain borders. Thanks again, these are great suggestions

gfriedrich,

perhaps I should mention that the Finnjet ferry is rather enjoyable. While it isn't brand new, it still is to my knowledge the world's fastest passenger ferry and therefore quintessentially an attraction of its own. It is well maintained and its cabins basically have the same standard as the sleeper coach compartment of a train. I have always enjoyed that segment of passage as it sort of decelerates a trip, a luxury seldom to be had these days. Plus the fresh air on deck and good Smorgasbord Captain's buffet for dinner contribute considerably to the enjoyment of such a trip. I would advise to get a seaview cabin, though, as space is at a premium and the interior cabins might feel a bit claustrophobic.
Driving time between Rostock and Berlin should be around 1.75 and 2 hours.
On the other hand, this still takes 2 days off your itinerary, so flying in combination with a local rental car might provide you with more precious time "on location".

BTW, should you also be in need of info on Berlin, I might be able to help, too, as I keep hopping between Hamburg and Berlin at least twice a month.

Regards
hsv

"...will I need to drive around the Russian borders?"

You'll notice if you consult a map that Poland borders Lithuania which you sould be able to drive through to get to either Estonia or Latvia. Therefore there is no "Russian border" to avoid on that particular route.

I first heard of this option from a Travel and Leisure article a few years ago. I couldn't find the exact article online, but here is another T&L account of someone doing the same thing! Have a wonderful time.

http://www.travelandleisure.com/invoke.cfm?objectid=267D2F7D-560B-11D6-82AF0002B3309983

Eliza,

I don't see how picking up a new Saab in Trollhättan, Sweden relates to driving from Berlin to Riga and on to Tallinn.
Perhaps you posted this on the wrong thread?