I suppose that based on the limited amount of information that I have written and on the general pattern of North-Americans that visit this forum, I can see how some people would get the general impression that I am am just one more of those North-Americans who don't know much about Europe and want to simply check off the cities from a list. But that's not the case. I was actually born in Europe and I have already travelled through a few European countries.
I really think that the choice of destinations is dependent on one's priorities. The reason for picking a lot of capitals and larger cities, as someone was wondering, is that high on our priority list is seeing architecture and art and imersing oneself in history. I have a degree in history and my wife has one in art history. Capitals tend to excel in offering that kind of experience, whereas charming little towns don't necessarily (though they may sometimes). So there's going to be a higher proportion of larger cities for that reason, than smaller towns. Small towns offer a different kind of experience, and we want that too, but to a smaller extent.
The time that I have assigned in each city is adjusted for the activities that we think we will do in it. As Bjoern remarked, some cities just don't warrant staying for too long, whereas for others even staying for weeks doesn't do them justice. So I've adjusted the number of days in each place to best account for that in my opinion... To answer to meyay, yes things may change, but it's a good idea to at least plan an itinerary and know where you may want to go next.
I appreciate the advice and the time that you people put into answering these questions. But I think that some of you jump to conclusions based on your own opinions and think that everyone should think the way you do. For instance two of you already remarked how going to Neuschwanstein is just a waste of time because it's not even "authentic" and it's "Disney-like". But have you even considered the fact that some people may want to go there for other reasons? I personally would think it very interesting to see what the 19th century romantic view of medieval history was, which after all is what this castle is all about. I've seen authentic castles, but this one I want to see precisely because it's not. And what's so wrong about that? Besides, it lies fairly conveniently on my itinerary, and it's got a beautiful location...
Anyway, I did take the advice of some of you and revised my itinerary.
England - London 7 d $210/d
Netherlands - Amsterdam -7 d (day trip to Rotterdam) , Enschede 3 d (we have family there) $167/d
Belgium - Brussels 4 d (again we have some family there) $108/d
fly to Spain (from Amsterdam) - Madrid 5 d, Cordoba 3 d, Seville 4 d, Algeciras 1 d (transiting - this is combined with another stay here later) $197/d
Morocco - Tangier 2 d, Chefchaouen 3d, Fes 4 d, Marrakech 5d, Essaouira 4d $91/d
Spain - Algeciras again (see above), Granada 3d, Valencia 2d, Barcelona 4d + another day for travel $197/d
fly from Barcelona to Italy - Rome 7d (we have a place to stay), Florence 3d, Venice 2d, Trento 5d (we have a place to stay, so we can rest there) $132/d
Austria - Innsbruck 3 d $210/d
Germany - Munich 4d (with day trip to Neuschwanstein) $172/d
Czech Rpb - Prague 4d $169/d
Austria - Vienna 4d $170/d
Hungary - Budapest 5d (we have a place to stay) $70/d
Romania - Cluj 2d, Brasov 3d, Bucharest 10d (family again and rest), Iasi 2d (yes more family), Moldavian monasteries 2d $50/d
fly to Greece - Athens 2-3d, Crete 3d, island-hopping 10d $150/d
Turkey - Kusadasi/Selcuk/Efes 3d, Pamukkale 2d, Konya 2d, Cappadocia 3d, Ankara 2d (it's on the way and I just want to see the museum of Anatolian civs there), Istanbul 6d, $100/d
This way I reduced the number of destinations to 39 (including 3 Greek islands), for 156 days, thus averaging a more reasonable 4 days per destination.