Kobe

I noticed that Kobe is on your list which I'm very excited about b/c I loved Kobe!  It has a bit of a western feel to it but is still distinctly Japanese.  The streets are wider, the sidewalks more pedestrian friendly and flowers on lightposts.  But there is still all the great Japanese shops and restaurants.  Sachi, if you haven't gone there already, you must go to this store called the Loft.  It's like a cross between an Ikea and Target.  You could spend HOURS in there!!  Such an awesome store and only a few blocks away from Kobe JR.  Another must see is the Earthquake museum, a quick subway ride from JR.  It's only a few years old and they did such an amazing job chronicling the experience of being in an earthquake.  Jason actually lived in a small town 15 minutes from Kobe during the great quake so it was an expecially personal exprience for him.  You may get information overload but it is still worth the stop.  And Lee, not to worry, the museum is VERY english friendly -- in fact the entire city is VERY english friendly.  Oh, and the little museum cafe is a pretty good stop for lunch too.

Osaka

I know a lot of people skip Osaka to go to Kyoto but I actually really enjoyed Osaka.  A must see is the Floating Garden Observatory.  The view is absolutely amazing and the journey to get to the top is an experience in itself.  Try to go at sunset and you'll be in for a real treat -- lots of good, cheap restaurants to eat in the basement too.  Also look for the underpass from the train station -- we totally went the long way through an industrial part of town.  Try to avoid that if you can.  We also went to the aquarium where the main attraction is a huge whale shark and a sunfish (I had no idea they were so BIG!).  It was a nice break but it sure was crowded.  You could probably skip it unless you're into aquariums (which we are).  Last but not least, are you in the market for souvenirs?  We found this little shopping lane called "Sennichimae Doguya-suji" where they have more dishes and pottery than I have ever seen in my life!  It was very intimidating at first but we picked up a lot of dishes and cookware that you just can't find anywhere else.  Great prices and best selection I've ever seen.  It was a hassle to lug the stuff around (I'm assuming you'd mail it back home) but I've enjoyed everything that we bought.  The hard part is finding the place and sorry I can't help much with that.  All I can tell you is that it is near the Nankai Namba station and from there Sachi will have to ask questions.  I absolutely cannot remember how we found that place but it was worth the journey.

Kyoto

I must admit that Kyoto was not my favorite place.  It may have been because it the first 3 days of our trip and I was nursing a cold.  It may have been that I didn't expect such development in what I had imagined to be a traditional place.  And I got templed out real quick.  BUT, there were things I liked.  One of them being where we stayed -- Ryokan Shimuzu.  Inexpensive, convenient, a GREAT bath (that can be reserved for just the two of you) and a wonderful staff.  The rooms were japanese style but with an attached bathroom.  There was also internet access downstairs.  LOVED this place and would highly recommend it.  Another thing I liked was the Kyoto Station.  I think a lot of people don't realize the view you can get if you take the escalators up to the top floor.  I'm not afraid of heights but there is something a bit unnerving about taking an escalator at a 45 degree angle for 12 stories!!  Very very cool.  Oh and one last thing, if you stay at the Ryokan Shimizu or anywhere near Kyoto Station there is a wonderful Kyoto style restaurant.  It is served Kaiseki style and is known for it's vegetarian meals.  Although this was one of the first meals we had, I still remember it as the best meal on our entire trip.  It's called Izusen and is in a very nondescript building (really easy to miss) above a McDonalds right across the street from the Kintetsu Department Store (Surugaiya Building on Karasuma Shichijo Dori).

Yes, yes I know.  Not the type of things you think of when you think of Kyoto (I can hear Stacy now!) but that's what I liked!!

Shinkansen or Bullet Train

As you two already know, this is by far the fastest way to get around.  The train is so fast that it has it's own special train tracks and very limited stops.  It also by far the most expensive way to travel and really only goes to main tourist hubs.  If you want to get out and see "Old Japan" you will have to get off the shinkansen.

Limited Express (aka LEX)

In speed, this is the next step down from the shinkansen.  It uses the same train tracks as other local trains, but usually makes very limited stops and will skip several train stations.  (Warning: if you are going to an off the beaten path train station -- make sure that your train actually STOPS there!)  Seating is spacious and comfortable and for long journeys this is the way to go.  You will know when you are riding a LEX b/c you will be given 2 tickets.  One is the normal fare charge and one is for the "limited express" surcharge.

Express, Rapid and Local Trains

Everything else falls into this category.  Don't get "Express" and "Rapid" confused with "Limited Express".  Again, the key is if you've paid a surcharge, you're on a LEX.  The "Express" and "Rapid" trains are actually just local trains that skip stops.  You pay the same fare whether you take a local or an express.  If you are on a budget, look for express and rapids.  They can sometimes be as quick as a LEX but w/o the surcharge (often adds between 20-50% more on the normal fare).  You do give up comfort (the trains are usually much more crowded) and space.  If you are travelling a long distance and with luggage -- stick with the LEX.

Confused yet?  Bottom line - for short distances or for sightseeing, look for rapids and express.  They usually run more often and are cheaper.  For long journeys which includes luggage (i.e. travelling to your next overnight destination) look for the LEX.  They are worth the extra $$. 

Some other thoughts...

Luggage - Travelling in Japan WITH luggage is a pain.  There is just no way around it.  Train stations often don't have escalators or elevators and the trains are not designed for large pieces of baggage.  Not only that, but Japanese DON'T travel with luggage so they'll stare at you.  Whenever you can, get rid of your stuff.  There is a luggage forwarding service called takkyubin that I've never actually used but wished I had researched it more before we left.  Also there are lockers in the train stations but it's very inconsistent and often full.  If you're going to a very remote location, I would recommend leaving your luggage behind and coming back to get it.

More than just JR - You may be surprised (I was) but there are several other train companies other than just JR.  If you have a Rail Pass, you'll be looking to travel on JR as much as possible.  But oftentimes (again for the more remote locations) you may have no choice but to travel with another company (i.e. Nankai).  Don't let this throw you -- also, keep in mind that although travelling on JR may be free (again, assuming you have a rail pass) the other train company may be quicker and worth the extra cost.

Train Planning - When I was in Japan we were travelling to a new town every 2 days.  Yes, A LOT!!  We got into the habit of mapping out our next destination almost as soon as we arrived.  Picking up train schedules, asking questions, etc.  If you know what your next destination will be, it is worth it to do a little planning.  Especially if you want to use the LEX.

Ok, that's it for now...hope this helps.  I'm looking forward to reading your next dispatch!

Shirakawago/Kanazawa - These are two different towns but they are so close to each other and represent such different parts of Japan (plus most of the guidebooks don't really tell you who EASY it is to see them in the same trip) that you get a lot of bang for your buck.  Shirakawago has gassho zukkuri style of architecture and is a photographer's dream.  We went there in winter (which was wonderful) but were so envious to see what it looked like in spring and summer.  Just beautiful!  Kanazawa has some very cool sights as well -- a well preserved geisha district (it's not nearly as opulent as one would expect) and a samurai district.  Not to mention one of the best gardens in the country.  A large enough city that you've got lots of choices for shopping and restaurants, but small enough that you can easily see the sights in a few days.  In any case, for just a 2 1/2 hour train ride on limited express from Kyoto, this is a must see!!

Nakasendo Highway (Tsumago and Magome) - If you're not planning to go to Kyoto, you can more easily get to this piece of "Old Japan" from Tokyo.  These are two post towns connected by an old samurai "highway" where they have been largely untouched by the modern age.  The towns have been preserved in the original buildings and now hold small stores and traditional style inns.  Very cool and a great way to get away from it all.  

In any case, if you guys do make it down that way I can write more about logistics -- the trains are kind of complicated as you are a bit of the beaten path.  But in the mean time, I attached some photos to inspire you to get out there!  

OH!  And if you want a really good website for more alternative stuff to do...check this one out (he has a lot of interesting ideas for tokyo too).

http://www.quirkyjapan.or.tv/