These are useful tips. Europe in the off season is definitely a great experience if you can get away.
As you pointed out, you do miss a lot of the special festivals, but on the other hand, the regular cultural seasons are in full swing, and you'll still find plenty of live music at pubs and bars, so no shortage of things to do.
In some major cities, hotels that cater to business travellers actually reduce their rates in summer, but you can still enjoy them on winter weekends, as they often have cheaper weekend rates. Hostels, though, are definitely less booked, which may make it easier to stay in the hostel of your choice than in the overbooked summer.
A good number of travellers that you meet will actually be other Europeans, since all the american/canadian students will be back at school. This can lead to local contacts and possibly accommodations in other countries on your itinerary - never a bad thing!
While out of the way places are great to visit during the low season, some actually shut down, or the transportation links are reduced in the off season (particular ferry links to some smaller Greek islands), so double check to make sure that you can actually get to the place you want to go! We had a hard time finding budget accommodations in Greece when we went in March a few years back - many were closed til April. Not a trip breaker, but good to know in advance!