It's very difficult to incorporate both the West Coast route (glaciers) and the inland route (Mt Cook) into such a short itinerary. Most visitors with limited time choose one over the other. These routes are separated by a mountain range and therefore getting from one to the other is time consuming.

For example, the drive between Franz Josef and Mt Cook is 498 km, well over six hours. The drive between Franz Josef and Queenstown is also about six hours. For those wanting to do both routes, the best way is to make a loop.

Driving from Lake Tekapo to Dunedin is another 303 km, and then backtracking from Dunedin to Christchurch adds another 362 kms.

This is basically a driving itinerary that will leave you very little time to see the places you're driving to.

It's not clear to me if you've already booked NZ domestic flights. If not, how about something like this:

Day 1 - Fly from Auckland to Christchurch
Day 2- Drive Christchurch to Franz Josef via Arthur's Pass
Day 3 - Franz Josef, helihike
Day 4 - Drive from Franz Josef to Queenstown, stopping at Munro Beach enroute to look for penguins (a bit late in the season though)

http://www.doc.govt.nz/conservation/native-animals/birds/sea-and-shore-birds/penguins/fiordland-crested-penguin-tawaki/facts/

Day 5 - Queenstown
Day 6 - Queenstown
Day 7 - Drive from Queenstown to Mt Cook, overnight OR spend a few hours, then continue driving to Lake Tekapo, for overnight and star gazing
Day 8 - Drive from Lake Tekapo to Christchurch for return flight to Auckland

This itinerary is very doable and incorporates all on your wish list except Dunedin, but as I assume you're only going to Dunedin for penguins, Monro Beach could very well be a good substitute.

Farmstays can be found just about everywhere. I suggest you look here to find one in the areas you'll be traveling:

http://truenz.co.nz/farmstays

You haven't mentioned Milford Sound, but two full days in Queenstown will give you sufficient time to visit Milford Sound toop.

Thanks very much your suggestion. I like your Itinery.

Unfortunately, we've booked our domestic flight. The AKL to QT via agent & not sure if it can be re-route. We'll try to check. The return flight CH to AKL is flexi fare we booked direct online. It can be changed easily.

It appears that all hotels in QT are fully booked during the Christmas Holidays (day 4 - 7).

A second best option allow us to start from QT may be easier in terms of rescheduling the hotel & flight bookings.

I suggest you look at hotels in nearby Arrowtown. We prefer staying there over QT anyway. Arrowtown is only a short drive from QT.

If you provide your actual dates, I'll help you look for accommodation.

The flight from Auckland to QT probably stops in Christchurch anyway, so it may be easier to change than you think. If so, all you need do is cancel the Christchurch to QT portion, which may cost a little bit in fees, but could potentially save you alot of aggravation and inconvenience.

Thanks very much for your help and the useful information.

Day 1 of our trip is 22 Dec. We will be arriving Auckland International Airport early morning on that day and have booked a direct flight from AKL to QT, arriving QT at 10:30 a.m.

Day 4 to Day 6 will be the Christmas Holidays 25 - 28 Dec. Our friend recommended Spinnaker Bay Apartment for us in their recent travel. We like the place, but it's not available on the Christmas Days and a bit on the highside during Christmas for a 3 days stay.

We are checking with the airline about the opton of re-routing.

1. How would you comment on the Drive from Christchurch to Franz Josef via Arthur's Pass? A special scenic drive that we should not miss?

2. How about the half day Otago Peninsular tour?


Stephanie

It's been ages since I visited Dunedin, so can't help there.

Regarding Christchurch-Franz Josef via Arthur's Pass...an interesting alpine drive over Arthur's Pass and across the Otira Viaduct, (an engineering marvel)amongst the Southern Alps. Then down along the gorgeous, lush West Coast. I personally adore the West Coast and much prefer this route to the dry, somewhat barren inland route, although it too, has it's good points. You'll see mountains, ocean and lush rainforest all in one go between Christchurch and Franz Josef.

http://www.arthurspass.com/index.php?page=11

There are some nice hikes near the village of Arthur's Pass - see above website for details. Also, many hikes along the West Coast.

Watch for kea, alpine parrots near Arthur's Pass.

Absolutely make the 45 minute detour north of Greymouth to Punakaiki, aka Pancake Rocks. All the better if you can time your visit with high tide.

I'll get back to you on accommodation.

I found availability for both QT and Arrowtown for your stay on these websites, but you'd better act fast.

http://www.latestays.com/new_zealand-arrowtown/

http://www.lastminute.com.au/accommodation/new-zealand/south-island-queenstown

http://www.ezibed.com/accommodation-specials.php/queenstown-nz/65/1

http://www.wotif.com/hotels/new-zealand-south-island-queenstown-apartments.html

http://www.ratestogo.com

PS - Villa del Lago comes up on a few of the sites above. I've stayed there a couple of times and would again.

Dunedin is a three and a half hour drive from Queenstown (without stops). The drive takes you through the beautiful Kawarau River Gorge and through the Central Otago Wine Country (including the town of Cromwell and the Gibbston Valley, also home to the original A.J. Hackett Bungy Jump at Kawarau Gorge). In the 1860s, these areas were dominated by the Central Otago Goldrush and you can still see evidence of this, as well.
http://www.centralotagonz.com
http://www.gibbstonvalleynz.com/gibbston_valley_attractions.php
http://www.cromwell.org.nz/things-to-do-cromwell/places/kawarau-gorge.aspx

After you reach Cromwell, you can choose to reach Dunedin by way of Alexandra or by way of Ranfurly. The Alexandra way takes you past rich agricultural areas and many roadside fruit stands. The Ranfurly way gives you the option of approaching Dunedin from the northern coastal route via the small towns of Palmerston and Waikouaiti.

On the Otago Peninsula you can expect to see endangered Yellow Eyed Penguins, the rarest penguin in the world, and endangered New Zealand Hookers Sea Lions, and endangered Northern Royal Albatrosses. You will also see NZ fur seals, and too many land and sea birds to list here. Dolphins are rare, though there was a pod of 50 to 60 bottlenose dolphins in Otago Harbor a few days ago. They had traveled about 150 miles from Stewart Island.
http://www.odt.co.nz/news/dunedin/238638/close-encounters-dolphins-spend-day-otago-harbour

If you go to Dunedin, I recommend a visit to this wonderful privately owned farm/ecosanctuary for the Yellow Eyed Penguins:
http://www.penguinplace.co.nz
OR the Monarch Cruise, which will take you onto Dunedin Harbor and offers an add-on of a tour of the above Penguin Place:
http://www.wildlife.co.nz/tours
OR Elm Wildlife Tours, which will take you to areas where you can see Yellow Eyed Penguins, Little Blue Penguins (also known as Fairy Penguins), NZ Hookers Sea Lions, NZ Fur Seals, and more birds than I can list here. They also offer the add-ons of a Monarch Cruise or a visit to the Royal Albatross Colony. 
http://www.elmwildlifetours.co.nz/our-tours/peninsula-encounters/peninsula-encounters
The Royal Albatross Centre is the only mainland breeding colony for any albatross species found in the southern hemisphere.
http://www.albatross.org.nz
http://www.newzealand.com/travel/media/features/naturesustainable-tourism/nature_taiaroa-head-royal-albatross_feature.cfm
This tour company is also an option:
http://www.natureswonders.co.nz

Dunedin's Orokonui Ecosanctuary (on the Port Chalmers side of Otago Harbor) is a great place for birdwatchers. They have many NZ endemic birds and tuataras (endemic reptile), as well.
http://www.orokonui.org.nz
http://www.odt.co.nz/news/dunedin/233962/more-tuatara-settling-ecosanctuary

The Yellow Eyed Penguins come ashore during the late afternoon until early evening, so if you go to Penguin Place, best to go in the late afternoon. The Little Blue Penguins come ashore after the sun goes down. You can see them at Pilot's Beach at the Royal Albatross Colony at Taiaroa Head on the Otago Peninsula. 

You do not have to take a tour, you can go to the beaches on your own and wait around for wildlife, but you are likely to see more if you take a tour. 

Dunedin is also home to New Zealand's greatest collection of Victorian and Edwardian buildings. Many of the city's attractions are free, including the Botanical Garden, the Otago Museum, the Toitu Settlers Museum, the Dunedin Public Art Gallery, and dozens of walking tracks and beaches, including Tunnel Beach, St. Clair/St. Kilda Beach, and Sandfly Bay. Non-free attractions include the Speights Brewery, the Cadbury Chocolate Factory, Larnach Castle, and the Taieri Gorge and Seasider Railway. 

http://www.dunedinnz.com/visit/home.aspx
http://www.newzealand.com/int/feature/tunnel-beach-walkway/
http://www.otagomuseum.govt.nz
http://www.otago.settlers.museum
http://dunedin.art.museum/home
http://www.taieri.co.nz
http://www.thealehouse.co.nz/tour.html
http://www.larnachcastle.co.nz
http://www.dunedin.nz.com/botanic-garden.aspx

Did you get this link?
http://www.accommodationz.co.nz/distances2.html

If for some reason you cannot change your flight, I too have some suggestions.
Melnq8 has a great deal of experience, I have less so, indeed a great deal less so since we've made but one trip to NZ. That said, I have experience with fast trips. And even I, a speedy traveler, think that Day 4 is too rushed. You want at the very least the best part of that day in Queenstown, and ideally a fourth night. I suggest:


Day 4 Queenstown (use Melq8's suggestion for accommodation)
Day 5 to Franz Josef (it's a long drive from Queenstown)
Day 6 Franz Josef
Day 7 to Christchurch (again, a long drive)
Day 8 fly via Christchurch to Auckland.
Day 8 is structured so as to give you some flexibility with flights. Personally I am never keen on itineraries that have one driving more than a trivial distance to an airport to make a flight out; you never know what can happen with traffic, weather, etc.

Enjoy NZ!

Presuming that you are hoping to do the stargazing tour with Earth & Sky, have you checked to see that the tour will be offered on the date you are planning on? Also, accommodation in Lake Tekapo itself is limited (it's not a large place), especially on Saturday nights. Some places will also insist on a two-night stay. You can usually find nearby accommodation in Twizel or Mt. Cook (you would be driving this short distance after dark, if this doesn't bother you).
http://earthandskynz.com/earthandsky/
http://www.tripadvisor.com/Attraction_Review-g644415-d1048728-Reviews-Earth_and_Sky-Lake_Tekapo_Canterbury_Region_South_Island.html

Also, December 28 will be the full moon and the night of the full moon, as well as the nights immediately before or after, are not the best time for star-gazing.

True, finding an accommodation at Lake Tekapo was not easy. We did finally confirm a room on 27 Dec.

Oh! What a naughty full moon ! I live in a city with heavy light pollution, thought beautiful. I miss a starry sky so much ...

Thanks very much for MeInq8 for helping to source the accommodations on the Christmas Days.

Thanks Sue's kind reminder.
Just a bit greedy to have Dunedin & Christchurch. I guess my daughter will like Antarctica Centre at Christchurch Airport. ^_^

I recalled that I was "scared away" from Queenstown on 25, 26 Dec. for try to avoid too many tourists over crowded the town.