Booked it before we left. I think you have to, though im not sure!!
Did it all from this site...
You could easily go and just buy the tickets as ye go along, thered be no trouble with that at all, and if your not planning on traveliing more than, say, 5 times, it would probably work out cheaper to buy them over there than paying for the ticket in advance.
If your planning on fitting in as many cities as possible, and want the security that if ye dont like a place ye can just pack up and leave, then go for the ticket!
The whole thing (ticket and accomodation and cheap beer and food) came up to a total of €2000 for me. Its expensive, but tis worth it!
I've heard some stories of people spending 4k and upwards but thats definatly going over the top.
The best thing i can tell you to do is to get a credit card, or use a friends or something, and book hostels off of hostelworld. Most of them are cheap and pretty ok(by ok, i mean 'liveable') You wont be in the hostel much anyway. We just booked hostels for the next city we were going to on out list as we went along. Worked out fine for us!!
Oh, and theres a music festival in budapest every summer, its really small and in the city, but its amazing. Think it was mid-late july it was on, not 100% on that either. If its on when ye'r there, i'd recommend it! Crazy ****!!