Itinerary suggestions

You are trying to do too much in Bolivia. You need twice the time. Travel in Bolivia is slow and unreliable.

I like the itenerary but you might be trying to do a bit too much in Bolivia like snoj said. Maybe you should set out to do it all but if you are getting worn out from the long travel, maybe cut off the Tupiza for 1 day and Sucre part which is far out of the way.
Here was my sample internary for you if you haven't bought transportation yet assuming you are flying in and out of Lima.

Lima for a day(Microflores) and then short fly to Cuzco($100). Relax and enjoy the town for the day. Maybe do a bike ride to Morey and Maras for a day which are really neat($25). Then book your hike once you are there as it is much cheaper that way(I paid $180ish for the 5 days including park entry fees). Do the 5 day hike which is nice and leave some stuff at your hostel in Cuzco (bring a lock). Then come back to Cuzco to relax for a day after the tough hike or spend a night in Ollayentambo on the way back.
Then you can train or bus to Copacabana Boliva which is on Lake Tititaca. Do a day trip to Isla de Sol which is stunning and spend the night on the island or in Copacabana (same price) which has alot of nice /cheap resturants. Then bus 3 hours to La Paz, which is a beautiful drive so you probably want to do it during the day or afternoon. La Paz is great to see but you should try to do the Lake rather than the 3 days in the city. You can also take a bike ride down the Death Road from La Paz which is a full day trip, not really that dangerous but fun and beautiful($65 with a good company). From there fly to Rorrenabaque for your 3 days and fly back to La Paz.
Then bus/train to Uyuni where you can book a tour and leave the same morning or the following morning. You can do this trip to end in Tupiza or maybe even San Pedro de Atacama Chile. From San Pedro, you could spend 2 days in the desert and bus to Ariquipa over 2 days staying one night in Iquegue, Chile. Araquipe is a great place for a day. Or if you want to do a canyon tour- its a couple days. From there Fly 1 hour ($65) or bus 16 hours ($40) to Lima to spend your last night.
Have a great time but just think that long bus rides are really tiring after awhile and cold and windy so its hard to sleep. Any other questions write me at cchaney21@yahoo.com.
Its better to do countries right rather than race through and have to come back and do parts again. There are alot of amazing places and a whole lot of South America inbetween. Cheers, and good luck!

I second the thought that you are in the Amazing Race. You should also add 3 to five days to your Peru section for Transportation even if you fly between spots that have flights. I would add 30 days so you are not in a Race with yourself and get exhausted trying to keep such a schedule. For instance Bus from Cusco/Machu Picchu, to Nazca to Arequeipa to La Paz is going to take a minimum of 3 to 4 days with the connections, with actual bus travel times of more than 48 hours [not counting possabilities of delays] ! Fly La Paz - Cochabamba then take The DC-3 flight from Cochabamba to Uyuni {Fantastic experience, but only three days per week] then bus to Potosi -see the Mint!,bus to Sucre and fly out of Sucre to La Paz [flying to Cochabamba from Sucre is routed thru La Paz] All flight s are AeroSur but you might try TAM the military Airline slightly cheaper and very much on time on the flights except Cochabamba to Uyuni. With Judicious planning you might do what you want in your time frame, but it is going to planning you routing according to flights existence in Peru rather than the use of buses. For instance Lima [good museums etc. - I stay at Gran Hotel San Martin because I like the people and the locale - not in Mira Flores!] then fly to Ica - Nazca lines, the fly Arequipa, then fly Cuzco, then fly La Paz. Total flying times less than 5 hours for all flights, just plan your days around days of departure flights, re-confirm flights before going to airports. However with this you miss avaluable experience travelling with people on the buses.
Relax and enjoy your trip!

My wife and I were in Peru / Bolivia this past September. My opinions regarding your proposed itinerary is as follows:
In Peru, skip Lima and be sure to visit the Colca Valley (From Arequipa)
In Bolivia, don't miss La Isla De La Sola in Lake Titicaca, reached via Copacabana. We used Corillion Tours to get there and it was great - and relatively cheap.

Don't spend too much time in Lima,
check out Huacachina if you like sandboarding and dune buggies (pretty fun, and doesnt require a lot of time)
Would be a shame to go through Peru to Bolivia and not spend at least one nite on Lake Titicaca: From the town on Puno in Peru you can visit the floating islands, overnite with a local family in Amantani, and visit Taquile on the return to Puno and/or from Copacabana, Bolivia visit Isla del Sol (overnite and return next day).

Bolivia is amazing if you have the time, dont try to rush through as many places as you can....skip Tupiza, and sucre and visit Potosi briefly to visit Cerro Rico mines (you wont soon forget that experience).....and i only say skip those places not because they are not worth visiting, but because of your time constraints !

Enjoy

All - Thanks for the reply and info

Snoj - I know, that's why I have 5 extra days in case I need more time. And I can always skip a step or two.

48 leaves - Spot on : I haven't bought my transportation and arriving to / leaving from Lima. Thanks for your input.

schmuck - I am going to Peru and Bolivia after chilling on Brazilian beaches for a month, and before chilling on Venezuelian beach for two weeks, so I am not worried to get exhausted. It's part of the thrill ! You seems to rely a lot on flight, I don't know if my budget will allow me to fly that much. For the whole month, I doubt I can allote more than 700-1000$ for transportations. I will have to take bus and trains mostly...

Qpfrog1 - will try to keep the colca valley in mind

Arcteryx - I did sandboard and quad in the sand dunes in Namibia and loved it ! Is it expensive in Huacachina ?

So keeping all your advice in mind and with a little research on my own, here's it what I could schedule. Again, comments and suggestions are appreciated.

(1) Feb 15-17: Lima: visit, paragliding, maybe surf

8h bus to...

(2) Feb 17-18: Nazca : flight over the lines, leave the same day

10-12h bus to...

(3) Feb 18-19 : Arequipa: visit the city, maybe the canyon rapidly or the colca valley

6h bus to...

(4) Feb 19-23 : Puno : 2 days island hoping, isla del sol, taquile, reaching copacobana

3h bus ride to...

(5) Feb 23-25 : La Paz : visit, maybe a day trip to San Miguel or Valle de la Luna

16h bus ride to...

(6) Feb 25-27 : Tupiza : horseride trip

8h train ride to...

(7) Feb 27-March 3 : Uyuni : visit of the salares

7h bus ride to...

(8) March 4-5 : Potosi : the mines

3h bus ride to...

(9) March 5-7 : Sucre : visit

8h bus to La Paz + 1h flight to...

(10) March 8-11 : Rurrenbaque : jungle trip

from La Paz, 4h bus to...

(11) March 11-13 : Copacabana : island hopping if not done earlier

16h bus to...

(12) March 13-19 : Cuzco : Salkantay trek

1h flight to...

(13) March 19-21 : Lima !

There it is. What do you think ?

Another very important aspect to me is the relevance of the trip during the wet season. How would that affect the jungle trip in Rurrenabaque ? The visit of the salares in Uyuni ? Is it simply not worth it at this period ? Thanks again.

About your flight to Rurrenabaque and your jungle trip during the wet season:
Be aware of the difficulties of flying to and from Rurre. Delays and cancellations may be frequent, as told in many threads here at TT. (Search for: flight Rurrenabaque). Have a flexible itinerary.

But Rurrenabaque and the surrounding rainforest and pampas are worth the trouble and are wonderful also in the rainy season - and what is a rainforest without rain! Prefer a tour offering a real lodge, which gives you dry and comfortable places to eat and sleep, and to leave your things.

The jungle/rainforest tours go by boat and foot. The pampas tours have a long drive: The road is likely to be either wet or bumpy after having dried up with deep wheel tracks in the mud.

A previous thread on weather and rain in February:
Bolivia travel in February--too rainy??, Posted 19 Nov 2007.
(This link to the previous thread is valid here in the new TT4 (the Thorn Tree version 4 of 26 Nov 2007), but internal TT-links in threads posted in the old TT3, before 26 Nov 2007, do not work any more).

One of the options for a rainforest tour in the Madidi National Park is San Miguel del Bala.

/thanks !