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13 days in Sacred Valley and Cusco, Peru -- ideas?

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We have 13 days between our flight into Cusco and our flight out. We're a family of 2 adults and 2 children (twins, age 10). We want time in the Sacred Valley, Machu Picchu and Cusco, without feeling rushed. Preferably we'd have 5-6 days in the same accommodation in the Sacred Valley, then a visit to Machu Picchu, then the train to Cusco where we'd rent an apartment for the balance of our time.

*Not rushing around* is key, because this will be just the second leg on a 5-month trip around the world. And it'll be the first new-to-us location (the first leg is NJ and NYC, which is familiar.)

I need to figure out:
where to stay in the Sacred Valley (what city/town to use as a base)
how to get there from Cusco on our arrival day (our flight arrives around 9am in Cusco)
how to get from wherever we're staying in the SV to Aguas Calientes (overnight there, then up early in the morning to hike up to Machu Picchu)
where to stay in Aguas Calientes - and for how long
how to get from Aguas Calientes back to Cusco
where to stay in Cusco

We are on a backpackers' budget with a preference for independent travel. We opted not to book multi day hikes and have decided to just do some day trips, to be arranged when we're there. We would prefer modestly priced apartment rental or basic accommodations. 1 quad room is preferred but not required.

The girls love hikes, art, and using their iPods as cameras, so we don't need any specific "kid entertainment". They'll also need some downtime for homework since we're "roadschooling" them through the last couple months of grade 5.

Thanks in advance, Fodorites, for your suggestions

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