Ten days is very short for both these countries, it might be better to focus on just one of them. It will also be difficult to find rental companies that would let you take the car across borders (for a reasonable price).

Still, if you really want to see them both do five days in each country. In Romania in those five days the best option would be to do the famous historic cities in southern Transylvania (Brasov, Sighisoara, Sibiu) and a bit of their surroundings, something like this:

Day 1 - Head from the airport straight north towards Brasov. Stop in the mountain resort Sinaia (2 hours from Bucharest) to visit the former royal palace Peles, then go west through the mountains to Bran for the so-called Dracula's castle or better yet to Rasnov for the local fortress. Spend the night in Brasov.

Day 2 - Visit Brasov's old quarter, maybe do a side trip to the medieval fortified churches in Harman and/or Prejmer (both less than half hour from the city)

Day 3 - Drive toward Sighisoara (2 hours from Brasov). On the way stop in Saschiz to see the local fortified church or maybe do small detour to see the more interesting one in Viscri. Visit Sighisoara in the afternoon and spend the night there.

Day 4 - Drive to Sibiu (~1 1/2 hours from Sighisoara), visit it and spend the night there.

Day 5 - If you manage to find a rental car that will let you go across the border, head directly south towards the ferry crossing into Bulgaria at Bechet or Turnu Magurele. Along the road make a stop at Cozia (1 1/2 hours south of Sibiu) to see the 14th century monastery
If you can't take the car over the border, head back from Sibiu to Bucharest (preferably over the high altitude Transfagarasan road), drop off the car, catch a bus to Ruse (nearest Bulgarian city, about 1 1/2 hours away) and rent another car there.

Thanks for the info, very helpful. Do you recommend spending any time in the 2 main cities Bucharest and Sophia if we can extend our vacation time? Also if you had only one country to choose which would it be?

Bucharest and Sofia aren't exactly their respective countries main tourist attraction, if you can extend your vacation spend more time in other more interesting cities (in Romania's case, Brasov or Sibiu).
On the second question, being Romanian I can't be really be too objective but I'd say choose Romania, it's more diverse.

thank you for the advice

Both Romania and Bulgaria are beautiful countries, and 5 days in each are not enough to discover their beauty.

The last cities you should focus on are the 2 capitals that really aren't the main attractions of these countries.

lol silly me.. that was from Feb2011...lol

Fodor's seems to celebrate the day of Romania today