This was our fourth European house or apartment rental, and I can’t say enough about how nice an alternative to staying in hotels this is. Not only do you have “all the comforts of home,” but it’s usually less expensive, you’re living outside of tourist ghettos, and because you’re likely to rent for a week or two, you can experience a village or city in a way that a short “arrive by train, book a hotel, stay for a day or two” kind of trip would.
While I’m sure there are those with negative experiences, we’ve had no trouble at all with the financial and logistical end of things. This time around we did a bank transfer of 200 EUR to the apartment owner as a deposit (Canadian banks do get a little confused about European wire transfers, and it did take a little doing on this end to pull that off), and then simply gave her a call on her mobile from the airport when we arrived in Lisbon and she met us at the apartment, gave us a quick tour, took the balance of the rental fee, and left us on our own for a week.
The holiday-rentals.co.uk site is just one of many similar sites that list homes, apartments, cottages and castles for rent. We’ve also found that craigslist is a good place to turn (look in their housing / vacation rentals section in the country or city you’re interested in).