Oh and when booking reservations in Europe, is it possible to book ahead? (for example: in warsaw can I get them to make my reservation for a future train ride from vienna)
And would I go directly to a train station or could I go to a travel agency?

This may be mistake #1. 2nd class is perfectly acceptable in Western Europe and many parts of Eastern Europe. You’re a lot more likely to meet locals and other backpackers instead of business suits and American/Canadian tourists if you’re in 2nd class. You must have a 1st class ticket or railpass to sit in 1st class. You can sit in 2nd class with a 1st class railpass. Since you’re going to be in Poland for 12 days before this trip, I’d wait until I got there to book the reservation — particularly since you aren’t traveling on Friday night. I can’t imagine a problem with this much time unless there’s some sort of festival, rock concert, whatever in Budapest that day. Yes, you should be able to make reservations for any leg of your trip at any major train station — although it’s probably easier in Western Europe. I would buy reservations at the train station (sometimes the reservations office is actually a travel agency that’s in the train station). Reservations will be slightly more expensive from a travel agency and it’s actually fairly tough to find a full service travel agency that deals with train reservations. Most travel agencies only deal with plane tickets and packaged tours.