This fall my family and I are going to Europe for about three months. The plan currently is to go to Istanbul and Turkey for about three weeks, London for about a week, Morocco for three weeks, Spain for about three weeks and maybe Rome and/or maybe Egypt. Pretty ambitious and sounds like a lot of travelling but the timelines are pretty generous. Anyways, my wife and I and our two boys have done this sort of thing before (five years ago we took a year off and spent 10 months driving around North America, from Baja to Florida to Newfoundland then back to Kelowna) so a lot of travelling doesn't bother us.
What does bother me is high prices and the Euro makes travel to Europe quite expensive. I've run through a few scenarios of the cheapest way to do it (RV, hostels, camping) but I think the best way is to stay in holiday villas and fly between countries. Europe is full of holiday villas, little one or two bedroom apartments, generally on the coastline outside of cities. The owners are there for the summer but in the off-season beginning in October you can rent them very cheaply, say, $400 a week.
Here are some of the better sites I've come across.
There's lots more but those are some of the ones I liked best.
Once in Europe, you can fly for incredibly cheap prices. Here are some of the better discount airline sites I've found.
A good site for comparing all the discount fares at once is:
Without a doubt, staying in London is a pricey business. Even staying at a hostel for a family of four is going to be at least $130/night. Fortunately a friend turned me to www/travellodge.co.uk. If you book ahead you can stay for a cheaply as 26 pounds a night for a family room. For the four of us, that's a great deal, especially given some of their hotels are right in the heart of London.