I’ve thought about this many times, but never actually planned out any logistics, especially things like how to get in and out of a major city.  Here are a few sights that should be informative.
 
www.eurovelo.com
http://www.interhike.com/ 
http://www.karmabum.com/
http://www.englicious.com/__bike/
 
There are a few books about cycling europe and most guide books will have a small section about it. 
 

Thank you! 

I have had a thought – I read that Eastern Europe can be done in as little as $20 per day, have any of you done a trip purely in Eastern Europe?  I have some family in Latvia, so I was thinking we could start up top and swing down.

Eastern europe is certainly a lot cheaper than western, but $20 per day would be pushing it in even the poorest countries.  And some of the Baltic countries actually are not very cheap, Latvia in particular, but I hear Lithuania is a good value.  One of the main savers in E.E. is transport cost, there is no need to spend hundreds on a railpass, about $35 gets you from one country to the next, domestic trains are even cheaper.  Last fall I spent several weeks in Romania and Bulgaria on about $30 per day, cooking a little,&nbspartying a bit.  I probably could have done it for a few dollars cheaper, but wouldn’t have had nearly as good a time. 
The downside to some eastern travel is that its much less tourist friendly and not always recommended for first time travelers. 
One of the best ways to save money is to limit the distance your traveling.  A lot of people want to visit a country per week, spend on a couple days in a city and move on to another.  They end up crossing the entire continent and spending a fortune in transport costs (usually a big priced railpass).  But if you stick to a smaller geographic area, don’t cross so many borders, and throughly explore cities small and large, you will end up getting more travel for your money (not to mention spending a lot less time in transit). 

We would be cutting transportation costs because we would be cycling.  My father did this in the 70’s and he was able to get pretty much from one side of Europe to the other with little public transportation.  We figure we can ride about 5 hrs per day, averaging 50 miles/d. So realistically we could probably do the whole thing taking the train perhaps twice, hopefully less.  Also camping out in fields and whatnot (we have all been avid outdoorsmen since we were small) would cut costs as well.

A lot of guide books don’t suggest riding in eastern europe countries because many of their roads are in bad condition.  On the other hand there is a good chance you will encounter less traffic and slower traffic.  And it definately can be done; Last year in Istanbul I met one guy who wasn’t a cyclist or anything, just got tired of normal traveling and decided to buy a bike and ride it (I don’t think he ever had any kind of rack, just a few necessities in a backpack).  He said he went from Slovenia all the way to Istanbul in 2-3 months going at a relaxed pace and never had any serious&nbsproblems, just bought local road maps and such.  I also met a couple from Germany who were riding their bikes around the world, they still had a long way to go! 

I always get really inspired when I look at the eurovelo site, but I think most of those proposed routes or something.  But there are some .pfd files for some of them that seems to have some helpful info.  If you do find any solid info, please let me know. 

Thank you!  I don’t have that much information about cycling  touring, there doesn’t seem to be that much out there.  But some people on other forums have said that if you camp and stay in the country you can live even in Western Europe for $30 a day.

yeah, I’m sure you can cut down the costs drastically.  I mean your saving about $25 per day on hostel costs, the cooking is going to save several bucks and transport too.  I remember seeing some good info on other forums too, I’ll see what I can turn up. 

Just found this UK touring forum that looks really good:  http://www.cyclingplus.co.uk/forum/forum.asp?FORUM_ID=3 
 
www.couchsurfing.com might be of interest to you also.  Its based on getting free accomodation from other travelers, though that might prove difficult for several of you.  You have to be logged in to view the groups and discussions, but there are a lot of people doing extreme forms of travel, cycling, hitchhiking, etc. 

Just found this site  http://www.trentobike.org/bycountry/index.html 
Its full of cycletour travel logs, some of them look really informative with packing lists and maps and some are just blogs with photos.  But they are categorized by country.