Craig,
Europe Through The Back Door will provide you with a lot of great information not only to help with planning but also how to travel efficiently. I suspect you'll have more questions for the group here once you've finished reading it.
I normally plan two things very precisely - transportation and lodgings. You'll probably have a bit more flexibility with lodgings in October, as Europe won't be quite as busy.
Your trip is a bit under a month, and I'd suggest not trying to fit too many destinations in, and avoid one-night stops as much as possible. Also, most importantly try to plan a logical route with no "backtracking" and allow adequate travel time between locations. You can work out the travel details once you have somewhat of an "order of cities" worked out.
It would help to know what countries / cities you're interested in visiting? It's difficult to offer suggestions on which type of "loop" is better without having some idea which countries will be included?
Hostels are a good plan for lodgings, but you might consider budget Hotels also as they're often not much different in price. Rick lists lots of choices in his books along with a "$" rating for the price. There are better listings in the country-specific books, as opposed to the general books such as Best of Europe. On longer trips, I tend to "mix" accommodations. As I travel solo, I find Hostels area great for the company, but I like some privacy at times too. I'm probably in the same age group as you, and haven't had any problem with staying in Hostels. I tend to prefer HI properties, but have stayed at independent Hostels also.
Good luck with your planning!
