I was in Cuzco in June '95 for the Inti Rami (spelling completely screwed up), which is the Inca solstice festival. The most colorful event I've ever seen in my life. The catholic festival of Corpus Christi fell at the same time, adding to the excitement.

If one can schedule their trip to Peru at that time of the year, I recommend the festival withour hesitation. Oh yeah BTW, Machu Picchu was incredible.

Cuzco is in my top five world-wide cities.