You talk about "us", so you're probably not planning on going alone. One more reason not to travel with a tour group. It's more fun making your own plans, you'll be able to stay longer in places you like, make some detour to see less touristic sites, meet other travellers at youth hostels, etc. It will be more of a valuable experience to you than travelling with a "guided tour".
Best way to travel in germany, austria and switzerland is going by train. I'd suggest looking e.g. at http://www.bahn.de for "rail pass" to get some information. Maybe try also this direct link
http://www.bahn.de/-S:PtVORN:ejAzNNNNjvyeNdNNNOtM/p/view/international/englisch/travelservice/backpackers.shtml
For accommodation (you can find more sites like these):
http://www.jugendherberge.de/de/
http://www.hostelmania.com/
http://www.hostelworld.com/
http://www.hostels.com/en/index.html
For preparation go to a good bookshop and look for a (backpacker) guide. If you have any further questions feel free to write an eMail - I'm living close to Frankfurt at the moment.