Travel by Rail in Europe on a Budget

It's not easy to travel by train in Europe on a budget, but there are lots of loopholes, if you know how to find them.

Steps

Get a Eurail/Interail pass. It is inexpensive and you can visit 17 countries. But, If you're not traveling everyday, consider buying your tickets at points of sale within the train station. It will probably be much cheaper.
Plan ahead. Most countries require a train reservation even if you are using a Eurail/Interail pass. It's about 7 euros per reservation and you must have one, especially in France.
Keep a map of Europe with you and a train schedule. It can be downloaded from Eurail.com. The Thomas Cook European timetable has train & ferry times for every country in Europe plus currency & climate information. Published since 1873, it's essential for any serious traveller and an inspiration for armchair travellers.
Sleep on trains. You paid for the pass, take advantage!
Lots of things cost money in Europe. It can be up to one euro to use the restroom, and up to seven euros to shower at rail stations.
Stay in a hostel! Book them in advance and you can get a great deal.

Using the Euro Pass is actually expensive; the best way is to do your booking on the train companies or use rail comparative sites. Do your homework on what options work best for your plans - you will save time and Euros.
Really think about how much time you have and where you want to see. Some countries don't take a Eurail pass (like Poland), but can be much cheaper to travel in. Other countries, like Italy, require a lot of local train trips to see the sights, so your pass wouldn't be economical.

Try to be very nice and respectful. Don't go to a foreign country and act like a fool. The nicer you are, the nicer they are.
Lots of (younger) Europeans know some English, but most people would prefer to use their native language. Consider that they may understand English, but be bad at speaking. In any case, it's always best to lead off with the local "hello" or "excuse me." Try to use the language by carrying a traveler's phrase book from your local library, if you can't invest in your own copy.
Don't forget to lock up your bag, and never keep your money or passport anywhere except on your person. You don't want to risk having your possessions stolen.