We liked the Rick Steves book on Istanbul. You might want to take a look at it.

Our trip took place during the spring, and we drove. Nonetheless, you might be interested in the Istanbul portion; click on my name to find it.

Istanbul is incredible -- you might want to extend your time there to 4 nights. Also, Cappadocia is a highlight, with both culture (underground churches carved out of the rock) and great hikes. Here is where we stayed: http://www.cappadocia.info/cappadocia-houses.html#pchevres
Have a great trip!

Yes, you could plan 4 nights - 3 full days in Cappadocia. Goreme is a good destination & the Kelebek Hotel is great. We used the shuttle they arranged from Kayseri. You can get cheap flights from Istanbul to Kayseri via Pegasus Air or AnadoluJet. There are many other options but these worked for us. Note: internal flights often leave from SAW Sabiha Gökçen - Istanbul's eastern airport.

Ian

Definitely include Cappadocia. Fly from Istanbul. Stay at least three nights. Perhaps too late in the year, but hot air balloon flight there is wonderful. Still worth it even if you can't do that. Hotel Esbeli Evi is fabulous. Once you have booked with them, let them know which airport and when you will arrive. They will arrange a shuttle pick up. Once there, talk with the hosts about what to see and they can/will arrange for a driver to take you many places. You can also rent a car, but we found their driver to be no more costly and saved us planing a lot ahead. That way, once you book, you can relax about that part of your trip.

Once you are there, you will see that Istanbul is a really easy city to get around, easier for me than NYC or DC (and I went to college there). Don't worry too much. Just check on opening times of the things you most want to see, and how to get tickets and you are set. We had great food everywhere (my favorite of any country I've visited) without planning ahead for anything special.

I hope you love it as much as we did. It is my favorite country after Italy and I would move there if I could.

One heads up. In Istanbul, sorry to sound unkind, but do not even say "hello", nod, or make eye contact with the rug vendors or you will be trapped.

Cappadocia is probably very cold in this season. Bring warm clothing. Ephesus would be milder.

Hello Starterfoodie,

My first recommendation is for you to change your first hotel in Istanbul if you can. I do not know about the rooms, facilities or amenities of eresin Topkapi but it is one of the worst locations you can have for lodging especially for NYE and during the short Winter days because it is in a poor neighborhood and rather close to the fundamentalist bastions of Istanbul where the people are against NYE celebrations and alcoholic beverages.

There are three areas where there are NYE celebrations are held in Istanbul, Taksim Square, Nisantasi and Ortakoy. The safest (against pickpockets and sexual harassment) is the upscale Nisantasi area which will also have terrific decorations and possibly street bands if the weather is decent in addition to large number of cafes bars and restaurants, many offering sidewalk seating with special heaters. I suggest that you get there reasonably early because the crowds will be dificult to wade through after 10PM.

Ortakoy may also be interesting but the area is smaller although directly on the Bosphorus waterfront with a terrific view and has fewer entertainment spots than Nisantasi.

I do not recommend Taksim at all because it will be a rowdy and lower quality crowd although with a great deal of security. There is also a great deal of construction going around Taksim and the decorations may not be very exciting at all.

Eresin, like most larger hotels will probably have a special NYE dinner and possibly a show with a Turkish singer or two for an absurdly high price. We have been to similar dinners just a few times at the Hilton, Swiss Hotel, Ritz, etc. and hated them.

In any case, you should easily find cabs that evening, till the next morning, however some of the NYE taxi drivers may not be the regulars and the replacements may try to scam you.

I would really look for hotels and/or apartments in the Nisantasi, Tesvikiye, Harbiye, Sisli, Macka area. Park Hyatt will probably be rather expensive but ParkSa Hilton can be a decent price. House hotel and some others will be in between.
Taslik Hotel is cheap but has some bad reviews on Trip Advisor.

Regarding your time outside Istanbul, the time is suitable for you to plan where you wish to travel on the first or second day of the new year, according to the weather conditions.

The possibly very cold Cappadocia (check for monthly averages for Nevsehir) may not be the best choice if there is heavy snow.

Or, a dry Cappadocia may be a better alternative than a rainy Ephesus.

Not wanting to drive limits your options because many lovely areas like the whole Lycian Way between Antalya and Fethiye would be impossible in the Winter with public transportation and very short daylight.

Ephesus is possible with an overnight and flying to Izmir with Atlas or Onur both of which usually provide shuttles to and from Selcuk. Ephesus is within a short taxi ride from Selcuk.

Another interesting overnight can be Isnik (Nicea) see my trip report here on Fodors and our photographs at esercelebiler on webshots.

Both of the above are usually given as day trips for the Spring and Summer months but would be not only difficult but also depressing on short Winter days.

Istanbul itself is a great hiking city, especially along the Bosphorus. Try from Kurucesme to Bebek, Asiyan and up to the back of the Rumeli Fortress and back down to the coast and as far as you can towards the Black Sea. You can also take a ferry from kabatas to one of the Princes Islands and enjoy walking there.

Hello again! Thank you everybody for you tips! This is what we have planned. Can you please suggest if we should make any changes or go ahead with all the bookings? Again, thanks a LOT for all your help!

30th Dec Leave NYC(JFK)
31st Dec Arrive in ISTANBUL(IST) at 4:45PM, check in hotel Barcelo (We are planning to get to the hotel via public transport/tram feasible on NYE considering we land at 4:45PM)
31st Dec NYE : Need to figure out what to do...........!!!!!
ISTANBUL
Wednesday, 01/02/2013
- Check out of Barcelo
- Drop of luggage at new hotel (TBD)
- 9:55AM – TURKISH AIR – leaves for Nevşehir

CAPPADOCIA / Nevşehir
Wednesday, 01/02/2013
- 11:15AM – Arrive in Nevşehir
- 40 minute drive from Nevşehir Airport to Kelebek
(Arrange with hotel – direct shuttle service 10 Euro per person)
- Kelebek Hotel and Pension (Goreme)

Thursday, 01/03/2013
- Kelebek Hotel and Pension (Goreme)

Friday, 01/04/2013
- 8:00PM – bus to Denzili

PAMUKKALE / Denzili
Saturday, 01/05/2013
- 6:00AM – Arrive in Denzili
- Dort Mevsim Rulz Hotel

Sunday, 01/06/2013
- 12:30PM – bus to Selçuk

EPHESUS / Selçuk
Sunday, 01/06/2013
- 3:30PM – Arrive in Selçuk
- Hotel Nazar

Monday, 01/07/2013
- Hotel Nazar

Tuesday, 01/08/2013
- 8:30AM – Get to Selçuk shuttle bus stop for ATLAS JET
- 11:30AM – ATLAS JET – leaves for Istanbul

ISTANBUL
Tuesday, 01/08/2013
- 12:30PM – Arrive in Istanbul
- NEED to find a hotel 01/08 till the 13th (when we fly back to NYC in the evening).

Thanks!