Has anyone hiked the Inka trail? What was your experience? Do you have to carry your own stuff, or does the tour company take care of that?

I had a great holiday in Cuzco and MP. I agree make sure you take your time to acclimatize a few nights in Cuzco is worth while and do not drink to much alcohol! I would recommend 2 nights at MP plus a day trip to the sacred valley is great.

As for the trek there are different lengths of the track you can do, different periods of time it can take and you can also carry your own gear or have it carried for you. It all depends on your fitness. But take your time and enjoy it.

It is a trip you will never forget

Well, I've planned out the itinerary for Peru, Sacred Valley, MP, Lake Titicaca, etc. with the help of Patricia at Perutravels. We are leaving July 2 and will return July 10. Although I cut the trip for Mrs. Outoftown and myself from 10 days to 8, the Pueblo Hotel from 2 nights to 1, this is still going to be the most expensive vacation we have ever taken by a factor of 2. My FT value-oriented sensibilities are upset due to my inability to game the system to get a bargain. Except for the award rt to Lima, we are basically paying what anyone else would pay. Am I wrong to feel slighted? I'm an FT'r so I am better than thou at the art of the travel deal I'm so used to getting free flights and hotels the last 10 years that having to spend over $500 for a week's vacation now makes me queasy. FT has spoiled me to the point I get more pleasure now in finding the "deal" trip than actually going on the trip. I'm afraid I may always think of the cost of this trip first before I think of what I experienced while there.

If anyone else will be there the same time, PM me and I will share our specific travel plans so we can have an impromptu dinner (or share a hike together!).

Outoftown

We had the same experience as you are having - a great deal on the flights but good hotels are very expensive. There seems to be no way around it. We were there in December and I did a lot of research before we went. Cusco, Sacred Valley, MP, Lima. I chalked it up to going at peak season.
We were advised to drive straight to the Sacred Valley on landing in Cusco, which reduced our altitude significantly in one hour. We stayed at the Sol y Luna, which I absolutely adored. It was also a relative bargain, less than $200 for a kind of deluxe large private yurt. Very comfortable, very private, very elegant in a rustic way, very well appointed. We stayed 3 nights and it was my favorite hotel in Peru.
We were at the Pueblo in Aguas Calientes (I believe the town is now called Machu Picchu). Very nice place, best food we had in Peru, orchid walk in cloud forest is not to be missed. Friends were staying at the Sanctuary, and as another poster said, the Pueblo seems the better choice, although if you're going for one night it probably makes sense to stay at the Sanctuary.
We stayed at the Monasterio in Cusco (beautiful public rooms, a real treasure of a private chapel off the lobby, tiny overstuffed bedrooms. Not worth the $400+ a night but we joined a bunch of people who had chosen that hotel, so we had no choice.)
Lima was the real surprise. We loved it. We saw not a single church or museum. We hired a fantastic taxi driver for a full day and went to several markets, to Callao the fishing town for the simplest best fish for lunch, to the city center and a look at the Hotel Bolivar. Then we met some local people and went to the (slightly) artsy district whose name escapes me in the evening. We spent 3 nights in Lima and wished we'd stayed longer. I know it's not on your itinerary, but if there's a gap between your arrival at LIM and your departure for CUS, I really recommend a cab ride around town.

OUTOFTOWN: As Kalkat said, Sol y Luna was very nice. I loved having our own "house." If you stay at the Pueblo, don't get a musty room. Again, I agree with Kalkat, GREAT FOOD. Good bar and lounge area too (when there isn't a big group taking over the joint). Be careful where the put you in Cusco, we got bait and switched and stayed in a very mediocre place across from the Monasterio. I'm still mad at the tour operator for that. For Lake Titicaca, are you staying on the Peru side (of which I know nothing), or are you going into Bolivia? Either way, have a good time. Don't forget to hike up Huana Picchu the first thing in the morning before the crowds. We also had only one night at the Pueblo. We toured Machu Picchu on our first day. The next morning, I took the first bus up, skipped heading to the Sun Gate for the sunrise and cut through the ruins to be one of the first up Huana Picchu for the day. That was the most special time at Machu Picchu for me. Don't do it though, if it's been raining. That last step could be a doozy.