My friend and I are planning a trip to Italy, Spain, and France. We plan to travel from may 22 til about June 19. I have talked with a travel person at the student travel place at school and she said that we would only need to reserve nights for the cities that we will arrive in and Leave from and that anything in between we would be able to just find a place. I would do this but others I have talked to have said that finding a hostel is a waste of valueble time. One person said to make reservations and if needed pay the small cancellation fee. One concern of mine is if the dates we are going will be heavy tourist times and if that would make it hard to find hostels. Making reservations makes me feel like we would loose some freedom. we already have a good idea of what cities we will be visiting and for how long. I really apprectiate any advice or personal experiences you have to share.
Those dates are not too bad for European travel in terms of being super busy, but the good places will start to be filling up. I like to at least have a place for the first few nights after a long trip. Depending on time, I would book more places if my trip is only going to be short since like your friend said, it can be a waste of time looking for a place.
On the other hand, if you're flexible and don't mind sleeping at the first place you come to (or have the time to hunt down a place you like in every city you visit) then you wouldn't need to do this. It's really a mix between your personal requirements and the time you have.
Also, in some cities like Rome it can be really hard to find cheap accommodation, so if you want a really good price then you're best off trying to get a reservation in early. The booking system for hostels here on Travellerspoint offers 'free' cancellations as long as you do so at least 24 hours in advance, but you'll lose your deposit and booking fee in this case. It's the same on any of the other systems that I know (there's actually only one decent sized and reliable different one and it's about a quarter of the size).
Booking ahead is a smart option, but this can be done with a decent guide book, a phonebooth and a calling card once you are in Europe.
You don't have to book all your hostel rooms from the US - fly in and make sure you got a place to stay for the first nights as well as a reservation for the last night before you fly out. Once there, you can decide when to leave and where you want to go next. Calling ahead and reserving a bed takes only a few minutes. It gives you flexibility and the opportunity to change your plans without loosing the safety of a pre-booked trip.
Most European cities also got a tourist information (usually near the train station or in the city centre), where you can simply turn up and ask for a room. They know the addresses of the official Youth hostels as well as the non-IYHA (private) hostels, pensions (aka bed-and-breakfasts) and the hotels and can get you almost always a place to sleep.
A friend of mine had the cheek to ask complete strangers to give him a bed for the night when he was stranded in Inverness (Scotland) and the hostel there was full. He just approached everybody who got out of Tesco's until he got to stay two days with a wonderful family in a small house at the outskirts of the city.
BTW, Eurorail is a very very good option - if everything is full and you absolutely cannot find a bed to sleep in (happened to me in London), change your schedule, hop on a night train and spent the night there. (It turned out for me that Edinburgh is very nice.) Visit whatever city your train took you to and return in the evening back the same way you came.