Two years to plan will be plenty. We usually take one year to plan and by the end of that year, I am pretty tired of guide books, videos, and internet research. That said, spending a good deal of time researching both places that you want to go and accomodations is time well spent - you will be greatly rewarded by taking time to do your homework.
I would recommend spending more time in certain areas, and not racing around trying to see everything. For one, you'll simply have a better experience. You will also be less tired and will have more time. Moving around, waiting for trains and buses, and finding and checking into and out of accomodations really eats up your time.
Since this is your first trip, I would recommend Italy. You could easily spend five days in Rome, then move on to Florence, villages in Tuscany, and Assisi. Capri is unbelievably beautiful, and if you get down that way, Pompeii is excellent.
In 2007, my husband and I went to Italy for a month in Sept/Oct. We went swimming off the eastern coast of Sardinia and the water was just perfect. So, if you are considering anything involving getting in the water, October will probably be just fine.
If you can take more time than two weeks do so. If you can manage three or four weeks, you won't regret it.
Also, the day that you arrive in Europe, you will probably feel terrible from the jet lag and may not enjoy your first day so much. So, on that day, don't plan to see any major sites (like the Vatican Museum or something like that), but pick out smaller sites that you can walk to from your hotel so that you have an easy first day.