Hungary-Czech Republic Itinerary - how does this sound?

You don't need 2 nights in Telc. One is perfect. It is a very small town. Are you using public transport? I think your itinerary is good.

Phew, the first two days of your trip are going to be doozys. First you have a transatlantic flight from California (with at least one plane change?), then you land in Budapest, have to get to the train station from the airport, and then sit on a train for another couple hours to Eger. I'd be a puddle by the time I got to Eger. Because of that, I'd consider just making Eger a day trip from Budapest. Alternatively, I'd research to see if there are other towns that look interesting to you that are much closer for an overnight or two. Or, if you have the stamina, go for it!

When are you going? if you are there with the chance do this, attending an opera/convert/play at the revolving Theater in Cesky Krumlov should not be missed. This runs from some time in early June through sometime in August, at night. It would be worth juggling the timing for if you are close.
I would also recommend switching the Budapest and Eger order, go Eger after Budapest, even if you have to go back to Budapest to get to Olomouc it would make for better use of your hours. If you think Eger is worth 2 days, then give yourself two days there!

Thanks to all for your advice, original poster here. We have decided we will have six days in Hungary, now the question is how to spend them. Having read Rick's description of Sopron, and viewed the Flickr photos, would love to squeeze it in. So still on the fence but in a different way. Here are the two alternatives for our six nights: Options #1: Budapast (5 nights), day trip to Eger, then Sopron (1 night)
Options #2 (original plan): Eger (2 nights, train there upon arrival); Budapast (4 nights); skip Sopron Counter-intuitively, the five nights in Budapest version allows less time to explore Budapest - only three full days. If we start in Eger and skip Sopron, we would have three and a half days or more, depending upon how early we leave Eger. So the question is do we include Sopron at the risk of perhaps not quite enough time in Budapest, and at the expense of an overnight stay in Eger? Sopron is speaking to me, despite being sleepy, it seems quircky and magical. But would hate to leave Budapest saying darn wish we'd had more time. We don't like to rush things too much, we usually take RS itineraries and slow then down a bit. It's not our first, last, or only trip to Europe. We have gone nearly every year over the past twelve years, missing only 2004 and 2009. As Rick says, assume you will return. But next time back might be seven or eight years. What do you think?

Sopron is a very nice little town but it's pretty far from Budapest (not speaking of Eger), about 4 hours by coach...
So travelling there and back to Budapest is a long time and I'm not sure it's worth doing so in such a short period of time. On the other hand spending 2 nights in Eger (which is also a lovely little town) might be a little too much, unless you spend a day sobering out after trying out a few of the over hundred of wine cellars in the "Valley of beautiful women" hmmmmm :) Budapest is a city where you atleast need 4 days. Especially bearing in mind that you said you don't like to rush things. So all-in-all I would opt for 4,5 days in Budapest and 1,5 days in Eger and leave Sopron and the area around it called the "Foot of the Alpes" for a later journey when you'll have more time and a car with you and then ultimately you can visit many more beautiful villages and areas in Western Hungary...

I would not bother with an extra day in Telc. Your first itinerary pretty good. Olomouc does make your transportation time a lot longer -- Maybe more of a souther path thru Czech - stopping in (maybe spending a night) in Bratislava. We picked up a car in Brno and looped thru the south. Cesky Kumlov was wonderful. most of the T towns only seemed to be worth a couple hours.