Be sure to rent National Lampoon's European vacation before you go. You will find yourself living the movie all over Europe.

I'm going to second the idea of Untours (www.untours.com). It's a great way to experience an area--my favorite was Austria, staying in Pfarrwerfen. (Here's pix: http://travel.webshots.com/album/115491557HbDEdt )

They give you great guidance without "hand-holding", and the profits that the company makes go toward developing businesses in developing countries. Definitely worth checking out for a family trip!