fly to Lima, then fly to Cuzco the next morning. From there, it is a train to Aquas Caliente, town at base of Machu Picchu. Then bus up to Macchu P.

Or hike the inca trail up to MP, either 4 days or 1 day hikes available.

Nice place to stay at MP = Inkaterra Machu Picchu (formerly Pueblo) hotel.

To see sights in Sacred Valley btwn Cuzco and MP, stay at a nice hotel in either Cuzco (city) or the smaller towns like Urubamaba or Ollantaytambo.

Check those out online or get a guidebook. Lots of posts here on how to organize the trip and itinerary. Start reading...

I'd recommend searching for some Peru postings here to get a sense of what you might enjoy and also checking out a good guidebook for itinerary ideas.
To answer your questions, your best bet is to fly to Lima and from there to Cusco (Cuzco), which is the closest airport to Machu Picchu. You can stay in Cusco and catch the train to Aguas Calientes (a 20-minute bus ride from Machu Picchu), or you could stay in the Sacred Valley and catch the train from there (Ollantaytambo), which is a shorter train ride - about 1 1/2 hours vs. 4. It depends on personal preference which is better. There's more to do in Cusco, but Ollantaytambo is a lovely little village - and lower in altitude than Cusco, making the adjustment easier. You might also want to spend one night in Aguas Calientes for the Machu Picchu portion of your trip, although it can be done as a day trip, with an early train in the morning and returning late afternoon. Tell us more about what you like, and we can give more advice.
A good basic itinerary is to fly to Lima, spend the night (your flight will prob arrive late), fly to Cusco the next morning and transfer directly to the Sacred Valley via car (taxi or guide - we can offer suggestions). Spend a couple of days seeing the Sacred Valley sights, then take the train to MP and spend the night there. Return to Cusco for 2-3 days and then on to your next destination or home. There are lots of variations on this, including a day or two in Lima, extensions to Arequipa and/or Lake Titicaca, and more.

If you'd like to read lots of details about my own trip last year, here's the link:

http://www.fodors.com/forums/threadselect.jsp?fid=6&tid=35080146

And if you'd like to see my pictures:

http://kbutler1122.zenfolio.com/f754704379


Good luck - and keep the questions coming. We can help!
Karen

I agree that a good guidebook is your best resource at this stage of planning.

Not that it's of any use now, but in four years, Cusco's airport operations are scheduled to be transferred out to the Sacred Valley between Chinchero and Urubamba. That will put the valley and MP a lot closer and provide more room for bigger runways than the present airport has.

WOW, that is big news, I had no idea about the airport plans. So people will get to MP faster after they land. I am so glad I am going in 6 months and not years from now.

I guess more hotels will spring up in Urubamaba and Chinchero. I hope Chinchero's Sunday market stays less touristy (in comparison to Pisac) like it apparently is now.

A lot of real estate is being bought up in the Sacred Valley in anticipation of such a move. I do hope there is not so much development out there that it spoils the valley.

On the plus side, it will eliminate the funny approaches that planes have to make to land and take off at the present airport. There should be fewer cancellations due to weather. With larger planes able to land, they're even talking about flights to and from other countries without having to change planes in Lima.

On the minus side again, if Cusco itself is your destination, you'll have a 30- to 45-minute ride to get to the city, compared to about 10 minutes to the city center now.

All not until about 2012 though.

We just spent 3 weeks in Peru. Flew in to Lima, spent the remainder of the night in the Lima airport and flew in to Cusco on the first flight of the day. There we hired a driver/guide at the airport who drove us to Ollantaytambo. We made any number of stops along the way for photos. Spectacular scenery! Once in Ollantaytambo we stayed at a small hotel on a quiet side street. Nothing fancy, but clean, private bath and a lovely little roof patio where you can see the ruins just on the edge of the village. We stayed two nights at the Andean Moon. They kept our bags for us when we took the backpacker train to Aguas Calientes and then the bus to the ruins.

Two tips - The train may drop you in the center of town and then leave for the return trip from the new station. That happened to us and we nearly missed our return train. Second - Cell phone access to and from the US can be very expensive, but the Internet and phone can be very inexpensive from the little internet shops. We paid about $0.30/hour (US) for internet access and $0.20/ minute for phone.

Be sure to check out the ruins at Ollantaytambo and the fantastic views from the top!

Cathy

Jeff,
Not until 2012? Will we be around to see it?

If I recall from my visit to Peru last year, the Mayan calendar ends in 2012. From witnessing the events of these past few weeks in US, it appears a financial Armaggedon is already upon us!

The Maya weren't in Peru. It's the descendents of the Inca, so I take it Peru doesn't need to worry about such things.

Sorry, I'm confused. You're right; I meant to say Inca. And actually, both the Incan & Mayan calendars call it quits in 2012.

http://www.2012theodyssey.com/articles-inka.html

Oh, Tess, I didn't know that about the Inca calendar too. Thanks. I think.