First of all you need to remember, that the worst thing that can happen to you is when everything went as planned. All the good stories you tell afterwards are the times when things went wrong. For example the time my bf forgot to get gas and I nearly killed him because we just made it to the gas station (after a diversion, a closed gas station, the tank sign in the car went to zero AND the car computer said there is absolutely no gas while we still had 5 miles to drive).
I like self planned, backpacking trips. All the tourist tours are so boring (getting out of the bus, taking pictures, getting in the bus again, going to the hotel eating stuff I know from home)
If I am alone I do real backpacking trips, if I am with my bf, we hire a car and drive. The first thing I do is to buy a "Lonely Planet" guide book (and a map) and have a look at their routes. The amount of planning depends highly on the duration of the trip. The shorter the trip the more planning. 3 month means roughly decision on route. 1 week means booking of hostels and decision on sights to be seen.
Whether or not you need to book in advance depends on the season. For a longer trip make sure its quite of season so you can go to the hostel first listed in the "Lonely Planet" and check in. If you need to book in advance check the hostel/hotel pages online. Sometimes hotels have quite good deals a few days before you want to check in.
What's in my suitcase/backpack:
passport/ID
cloths suiting the temperature, lots of layers and never more than one pair of trousers and one jumper
toiletries
cagoule
extra backpack for day trips
sun hat
camera + accessories
Swiss army knife
First Aid Kit
inflatable travel pillow
pen and paper
earplugs
sleepingbag
foreign money/credit card/ (travel checks - only on long trips)