Went to Peru in June of 08. cmerrel: my husband has high blood pressure and did just fine except for about 1/2 day in Puno. Took some O2 and was better after that. We drank lots of the coca tea. His doctor also did not want to prescribe the diamox. I had tons of energy, that I attributed to the tea!!! For beazor and others: Cusco: stayed at Torre Dorada. WONDERFUL people, helped us track down some lost clothes. Also, has a driver on site that takes you anywhere.
Olly: Casa Andina Private Collection. Very nice but quite removed. Also stayed at Pakaritampu. Beautiful grounds. We nearly had the place to ourselves and enjoyed the alpacas on site. Puno: Casa Andina Private Collection. Very nice. Arranged trip to reed islands at desk. They drop you off right at the hotel's private dock. Lima: Second Home Peru. Right on the ocean and probably one of the best places we have ever stayed, all for about $90. Also had a taxi driver that took us everywhere.
For some tours, I contacted Condor Travel. I can't say enough great things about these people. We met them in Cusco and had a private driver and guide take us to Olly. We took some "shortcut" drives on dirt roads through little villages. I had them stop several times and visited with some school children. One of the highlights of my trip. We used them for 3 days of private tours - Cusco to Olly, Pisac, Olly ruins, Cusco city tour and ruins and Lima 1/2 day city tour. They also lined up the MP train and guide there. Another favorite was an impromptu trip to Awana Kancha. I had read about it and asked our guide to take us to the alpaca farm!
The bus trip from Cusco to Puno was very long. They break it up a bit, but I think we would not do it again. We would either fly or take a train to Puno.
Hope this helps.

Thanks to all of you for the great info. Most likel I will plan it all on my own. Dear Beazor, I am still missing the info of the travel agency that organized the 3 day trip from Arequipa to Puno via Colca Canyon and the Titicaca. Could you please let me know who organized this?
Thanks for the tip of drinking water and that most people speak English.
One more question: we will sleep in Lima one night and fly out to Arequipa the next evening. Is there a good hotel near the airport, not too expernsive? s it a good idea to sleep near the airport? so we can leave our stuff and go to see Lima in the morning and then pick up our stuff and get our flight.

Regarding hotel near the airport ... only good one I know of is Ramada Costa del Sol, which is attached to the airport terminal. A bit on the expensive side for an overnight stay, but it was so worth it when we arrived into Lima shortly before midnight and had an early a.m. flight to Cusco the next day. Breakfast is included (though nothing elaborate), and you can use the free pisco sour coupons you receive on check-in for bottles of water if like us you arrive at 1:00a and aren't up for a drink. (By the way, traffic is horrendous and can take 45 minutes to an hour to get into the city depending on time of day.)

There is a website through which you can get better rates than using Ramada's website. The name of the website escapes me, but someone else might post it. Or do a search for Ramada here and on the TripAdvisor boards to find the name of the website.

We arrive around 10:30 pm and we leave the next evening. We want to take a look at Lima for several hours. I suppose we can stay near the airport or near the center. We want to leave our stuff at the hotel while we are exploring the city. So, what is the worse time for traffic? DO you remember?
Thanks!