I wonder about Turkey to Portugal by sea. There are cruise ships in the Med, for sure, but you would be hard-pressed to find one going all the way from Istanbul to Spain (I doubt you'll get one to Portugal), so you will have to take two, and it will likely be expensive. And you don't want to be in port with thousands of other passengers. I would take boats via the islands to Athens, and then either go overland through the Balkans or take a ferry to southern Italy. No reason you can't go to Spain and Portugal from there and then back into central Europe.

For lots of info on trains in Europe see seat61.com. The only way to tell whether a pass is better than point-to-point tickets bought early is to set your itinerary and then price the tickets. Seat61 will give you the links to do the pricing. You might find Thomas Cook's "Rail Map of Europe" useful for planning.

For budget airlines see whichbudget.com and skyscanner.net. With kids you might look into leasing a car (not my field of expertise), or even an RV - see http://www.soultravelers3.com/ for a family that does that.

For general info on budget travel in Europe see Lonely Planet or Rough Guide, or "Europe Through the Back Door". For budget travel worldwide see Hasbrouck's "Practical Nomad". You might also do an on-line search for other families doing RTW trips - there are others out there.

Thanks Thursdaysd for some great information. Sorry I was not clear regarding our intentions between Turkey and Spain, the plan is to make our way there slowly by exploring many of the sites along the way. I would like to explore some of the Greek islands perhaps all the way to Crete, then ferry to Italy, train across to the west coast, then??? perhaps more ferry or train along the southern coast of France. This is why I am wondering if the Eurorail pass is a good value for us - or should I purchase tickets as we go? I will look at the other sites you listed - thanks again.

Did you know there are two kinds of RTW Tickets from the airline groups?
Star Allience: Tickers are good for x number of miles, can have up to I think it is 15 stops, You need to start and end in same county though not same city, but you can't cross back over an ocean you need to keep going forward. It also counts as milage areas where you may drive or take train between cities.
One World: on the otherhand offers two kind of RTW milage and segements.It is based on number of continents (3-6), has no milage limit and if you do segements you can have up to 16 flights and the transport inbetween is not counted as part of your milage.
So you really need to look into which would work the best for you.

You might want to review some general books about such travel if you haven't already such as "The Rough Guide First-Time Around The World" or "Around the World in Easy Ways: A Guide to Planning Long -Term Travel With or Without Your Kids" or "The Long-Term Traveler's Guide: Going Longer, Cheaper, and Living Your Dream". I am not particularly recommeding any of those. Just what I have found on amazon.com. You don't necessarily have to buy them. Many travel books are available through your public library either directly or through inter library loan if you ask the librarian.

First, some basics on RTW tickets bought through members of the various airline alliances (Star Alliance, Oneworld, SkyTeam.)

Big factor no. 1 - the tickets are priced very differently depending on where you buy them and where you begin and end the trip. For example, if you used Oneworld's very popular "Oneworld Explorer" for your trip, a 4-continent ticket (North America, Southwest Pacific, Asia and Europe) bought and begun in the US would cost $5299 for each adult, and $3974 for each kid, for a total of around $18,550 for the family. (This is the base fare, you'd also pay something like 10-20% more for airport taxes and airline fuel surcharges, depending on your route and carriers.)

If you bought and started the ticket in the UK, with the same stops (i.e. Costa Rica, then on the South Pacific... and ending later in the UK) the base price would be $3337 for adults and $2502 for the kids, for a total of around $11,680 (plus the same taxes and fees) for a savings of something like $6900. Can you get your brood over to the UK and back for seven grand? I would think so.

The second big factor is that you're allowed no more than 16 flights (that's the limit for e-ticketing across the industry) and if you choose any other RTW ticket but the Oneworld Explorer, no more than the maximum mileage allowed, which can range from 26,000 up to 39,000 miles. (Your route would be right at, or over the 39K mile limit.)

Those 16 flights have to be on member airlines of the various alliances, so if there's no direct flight between two of your points (e.g. nothing between Detroit and San Jose CR) you have to change planes someplace, consuming an additional flight segment. Or, in some cases, there are no services at all to your target, for example there's no Oneworld service from Tahiti to North America, New Zealand, Australia or Asia - only Chile. (The main Oneworld airlines contract with other airlines for "codeshare" services to these places, but those flights aren't allowed on the Oneworld Explorer.)

So because of the mileage, segment, and service limitations, it's best to use RTW tickets as a "backbone" for your trip, using those 16 segments on flights where you're saving money with the fixed-price RTW ticket compared to the "over the counter" price.

For example, say your price for an RTW ticket turns out to be $4800 all in (just picking a number.) That's the equivalent of 16 flights at $300 each. That's a very high price for a flight between London and Copenhagen that you can walk up and purchase for $140 any day of the week. On the other hand, $300 is dirt cheap for a flight from Los Angeles to Sydney, so it balances out and usually ends up being cheaper than comparable point-to-point fares. But for example with your Europe segments, using the RTW ticket for flights that can be bought very cheaply using low cost carriers (or a train, or a car) is a relative waste of money.

The same goes in places like SE Asia, where there are numerous cheap airlines flying around Thailand, Vietnam, Malaysia etc., but less so between New Zealand and Bali, or Japan and Sri Lanka. See what I mean?

So most ambitious travelers will use the RTW for the "expensive" or long-distance flights, then buy separate tickets "outside" the RTW during stopovers. For example, fly to Denmark and explore Scandinavia or maybe Germany from there, rather than burning two RTW flight segments to fly to Helsinki and back.

RTW tickets are complicated and have lots of rules. But they're worth it, or else the airlines wouldn't sell as many of them as they do.

Places for more study:

Oneworld RTWs: http://www.oneworld.com/flights/round-the-world-fares/

Star Alliance: http://www.staralliance.com/en/booking/book-and-fly/

A great mapping tool to see how long your route is: http://gc.kls2.com/

The Flyertalk alliance forums where RTWs are the main topics: http://www.flyertalk.com/forum/global-airline-alliances-391/

I've done 2 RTW trips, both times the air portions of the trip were bought from Airtreks, a specialty consolidator in San Francisco. I suggest you spend some time on their website and play with the Trip Planner feature. You'll end up, if you choose to, with an agent to fine tune and purchase. Also take a look at their Airfare Specials.
http://www.airtreks.com/

All the information given by you is really good.

Wow, lots of great information everybody - thanks. I will start doing some more research on how these tickets work but can somebody answer one questions? Gardyloo, I understand what you are saying about using a RTW ticket for expensive legs but am I able to have gaps between my destinations? For example what if I fly to Instanbul and then make my way to Spain and then fly from there using the RTW ticket?

The Trip Planner on Airtrek's website gives you exactly that option, called overland, between any points you choose.

I don't know how that works if you're paying for the tickets, but if you're using miles you only get one open segment. Note that the OneWorld RTW award is a great deal with miles, it's only 50% more for biz class.

I should give you my itinerary of 2012 to illustrate the versatility of using Airtrks.

1. Air, Airtreks, San Francisco to Shanghai.
2. Air, Airtreks, Shanghai to Xiamen.
3. Air, bought myself, Xiamen to Guilin.
4. Overland (train), Guilin to Nanning to Hanoi.
5. Air, bought myself on Air Asia, Hanoi to Bangkok.
6. Air, Airtreks, Bangkok to Yangon.
7. Air & surface, several segments bought in Burma.
8. Air, Airtreks, Yangon to Singapore.
9. Overland (sea), freighter Singapore to Malta.
10. Air, bought myself, Malta to Rome.
11. Air, Airtreks, Rome to San Francisco.

So generally, of 11 segments, 5 were from Airtreks and the rest - air, rail and ship segments were purchased by me, some in advance and some as I went by necessity. It worked very well. No glitches whatsoever. Only 1 flight which I'd bought myself needed to be adjusted, the flight to Rome because of a schedule change by the ship.

Gardyloo, I understand what you are saying about using a RTW ticket for expensive legs but am I able to have gaps between my destinations? For example what if I fly to Instanbul and then make my way to Spain and then fly from there using the RTW ticket?

With the alliance based tickets, you can have "surface" segments, however each one consumes one of your 16 entries on the overall ticket. For example, say you fly into Istanbul but want to go by train to Budapest, then Geneva, then Paris, then Madrid, then fly from Madrid to Argentina. The ticket would still show an Istanbul - Madrid segment, however it would be unflown. You can't recoup that segment someplace else.

Thus my recommendation for using RTW tickets in circumstances like that is to try whenever possible to do "supplementary" trips as loops or hub-and-spokes rather than as strings, so that you don't burn too many segments with no benefit. Remember you've paid for them, so try not to leave money on the table. Of course it won't always work that easily, but in many areas where there is high-density and affordable air or surface transport (e.g. western Europe, SE Asia, the NE coast corridor in the US) it's not too hard.

There certainly are instances, such as the Singapore - Malta freighter cruise cited by MmePerdu above, where RTW tickets are NOT the most cost-effective means. While they have more flexibility than many people believe, they're not infinitely flexible, and they're air tickets, not cruise nor freighter nor train nor any other kind of ticket.

You can save money by flying on low cost airlines where available, but there are routes where there aren't low-cost alternatives, and if you want to include those routes in an RTW trip using buy-as-you go tickets, you'll find you've spent way more than if you used an RTW.