There are zillions of posts with suggestions of favourite places, I hope you've had a chance to look through a couple of the forums. I'd start with Europe:Western, but also check out the itinerary forums as well, as there are a lot of useful tips in there as well.
It is a bit difficult to recommend places to other people, because a lot of what appeals about a place is very personal. A good rule of thumb is to think about what sorts of things appeal to you - is there anywhere you've ever dreamed of going, seen a picture or read a book and thought "Someday, baby..." ? If so, go there. Then, grab a couple of different guidebooks from the library (different publishers, because they have different info, often) and start reading about particular countries and places. That'll give you a good idea of what you want to see in particular cities/towns/villages. When you've got that sorted a bit, work out a route, with all your choices on, weed out some of them, because you don't have time to see them all, and then fire your questions at the tpunk masses. Once you have narrowed down what interests you, it'll be easier for us to help.
It's usually pretty hard to not look like a foreigner/tourist in another country, esp. across the pond, only one reason is that the styles are quite different. We live in Germany, and in the past two weeks have been in France and Netherlands. Both next-door neighbours, and quite different styles. So if you really want to fit in, bring a couple of basics and buy yourself something in country.
But since this can be impractical, I'd bring a couple of pairs of pants/capris/convertibles whatever, some shirts (peasant style blouses and long tiered skirts are popular this year, it seems - but they can be a bit bulky), some sort of strappy dress for evenings, a swimsuit and a sarong.
I think there may be a whole separate thread dedicated to sarongs, they are the bomb for traveling. You can wear them as skirts, dresses, tops, beach cover-ups, shawls (with said strappy dress); use 'em as towels, blankets, picnic blankets, sunshades, umbrellas, laundry baskets; they wash and hang to dry overnight and the batik patterns hide dirt and wrinkles rather well.
If you're not planning on hiking, a good comfy pair of leather walking sandals should serve you well, and you might bring along a pair of beaded sandals for evening and a pair of flip flops for the shower. If you plan on more rugged walking, you'll need a sturdier shoe and good socks.