Read masses, ideally you should know more or less what you want to do before you book any of it. Consider different options for getting from A to B - the quickest way might not be the most enjoyable, the cheapest may not offer good value. Otherwise prioritise based on what you're interested in - I had a great time in Venice largely because I didn't go to any art galleries and only to one museum.

In terms of how tightly you should plan, I think it depends on your personality. I am going on an 11 day trip in May/June. Accomodation is all booked, all the transport that can be booked is booked and the locations of my hotels are marked on the maps in my Lonely Planet. I'm currently trying to find what food you can buy at Sarajevo railway station (it's a 9 hour ride to Zagreb and there's no catering on the train). But I don't have many strong plans for what i'll do in the places i'm visiting - apart from a few must see things which I have researched in detail. Incidentally I've bought a small notebook to write all this info down in.