Clausar - you have any hotel recommendations for Chania? I splurged a bit in Santorini and Rethymnon and I am feeling guilty about getting another expensive room. I like the idea of being on the water but....we will of course have a car too.
I figured since we would be pretty tired getting to Rethymnon that might be the place to splurge on (balcony looking over the sea)...

In Chania i would recommend Hotel Creta Palm, a 4 star property located in the suburb Kato Stalos(7 km away from Chania old city. It's a good hotel at a very low rate !!!! plus you won't have any problems with parking there, like in the old city of Chania.
http://www.creta-palm.gr/

Clausar,

I found a news clip that the Archaeological Museum is finally supposed to open in 2012. Do you have any idea if that is true? If not - is the "temp" exhibit still worthwhile?

I am now thinking, instead of seeing Knossos on our first day after we land and pick up the car, that we go directly to Rethymnon instead. Then on our last day we can see Knossos in the morning, then head to the museum, then to our hotel for the night.

Thank you so much for your help!

not_enuf_vaca
I didn't have any information about the opening of the Museum, so i gave them a call.
They don't have any official information either, i was given the advice to call in 2 months again.
At the moment you can see a temporary exhibition of all the highlights of the Museum, so i think a visit is worth it in anycase.
The Archeological Museum of Heraklion is famous for hosting the biggest collection of Minoan Art in the world.

Thank you Clausar!
Its funny - when I searched the internet - I found a press release about it opening in 2010 one saying it would open in 2012 :).
So now, since we will be in Rethymnon by 2? I need to decide if I want to spend two nights there and just drive to surrounding sites or spend a night somewhere else as you suggested. I read an old post of yours and did some research and looks like Economy Car would be a good choice for a car rental. Just need to decide how to handle the drop off without having to navigate the streets of Heraklion.
Thank you again for all your help.

You can easily spend 2 nights in Rethymnon and do some day trips. Personally i like the old town of Rethymnon better than Chania, while Chania has a bigger venetian harbor...
the sandy beach of Rethymnon is beginning right in the old city and it is the longest of Crete ....
Avli is my favorite restaurant in the old city a second one is a simple tavern bit outside of the city, named Komvos.
It is very very popular amongst the locals, and it is famous for its grilled cretan meat.

As for the car, i wouldn't book a car based on the lower price, but on the best service.. and that is only if you book from one of the international companies, such as Hertz, Avis, Europcar, National etc.
I know many stories where ppl with a cheap rental car had a problem somewhere in the island, and had to wait for hours to get help... It's better to pay a few Euros more, in order to stay on the safe side.

Thanx Clausar - will stick to my original plan with two nights in each city (which is what I prefer anyway :) ).

I will take note of all your suggestions for Athens and Crete (and search some of your older post as well).