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Germany & Austria in May 2012

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Planning a holiday in Germany & Austria in May 2012. We are from India. We are 2 adults and 2 children below 10 years. We are interested in doing a mix of city and small scenic town/villages. Looking forward to good wholesome German food & Austrian food - not something pricey and touristy. Can someone recommend an itinerary for approx 15-20 days. We are budget conscious and would like to stay in places that are safe & clean with attached bathroom with easy accessibility to train and local restaurants/chain stores. We will be using public transport. Could you please highlight the dos and donts whilst travelling in Germany & Austria. Also, would appreciate some info on the usage of trains in Austria?

Have heard about the Harz mountrains but not sure which village / town to be based in.
We would like to visit :
Rhine (any recommendations on the base town for 3 nights)
Dresden or any smaller village/town
Salzburg or any smaller village close to Salzburg which is cheaper to stay and easier to get to Salzburg
Innsbruck or any smaller village cloe to Innsbruck which is cheaper to stay and easier to get to Innsbruck
Any recommendations for small scenic Austrian village or farm where we can stay for a couple of nights.
Not sure if I can add Prague.

Any recommendations on which town & guesthouse to stay are welcome.

Have tagged this message for Austria too as we need recommendations for both countries.

Kind regards,

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