Not climbing related because my girlfriend isn't into that, but does anyone have any info on how to do this trip super cheap? I can get roundtrip airfare out of nyc for 560(per person) to lima. We would need to get to Cuzco, and then take a train? Whats the deal with the train, does it go all the way up? I don't want to pay an extra 1500(x2) for a guided trip that is a walk about. Any info would be greatly appreciated. This is going to be a surprise trip, she doesn't mind dirtbagging it for a bit for a cool trip.

Ever hear of Lonely Planet?
Anyway, the train from Cuzco will get you to the town at the bottom of MP (Aguas Calientes) in about 4 hours, where you'll mostly likely have to spend the night unless you really want to rush through there in about half an hour. The town is fairly spendy for Peru, obviously because it's the gateway to MP. There's a bus that runs up to MP early in the morning and you can probably catch the afternoon train back to Cuzco.

The best way from Lima to Cuzco is by air. I think I paid around $175 round-trip when I went. The bus ride is something like 24 hours and supposedly really uncomfortable.

As far as the cost for a guided package, your number is way off. I did the 4-day Inca Trail with the guide, porters, food, tents, and all transport to and from Cuzco included for $250 per person. And that was during the high season. You should be able to get a similar 2-day package from Cuzco to Macchu Piccu for much less than that. Where are you getting this $1500 figure?

As MichaelJ said, there are trains from Cuzco to Aguas Calientes and then buses that run from Aguas Calientes up to Machu Picchu. Aside from walking the Inca Trail, I think train is the only other way to get up there. However, the backpacker train is significantly cheaper than the others. Also, though the buses that go up to MP are quick and easy, if you're feeling adventuresome/want to shave off a few $ from the trip you can walk up. I think it's ~1 mile from Aguas Calientes up to MP, maybe a little less. Most people I talked to said it took them 45-60 minutes to hike it.

I've heard that unguided trips to machu picchu were banned recently. Is there any truth to this?

You can't get a permit to do the Inca Trail to Machu Picchu without a guide, but you can certainly walk up from Aguas Calientes without a guide.

As others have said. You need to fly to Cuzco from Lima. You can take a bus but it'll take forever and the cost advantage isn't worth it. You'll arrive exhausted and waste precious time. Cuzco to Macchu Picchu is by train. There is a cheap train that students take that is relatively cheap. I believe the disadvantages are the departure times back to Cuzco. I don't think you have to have a guide, but it is worth it, otherwise you just walk around and look at a bunch of rocks without knowing what you are looking at. Remember part of the experience is learning about this place, not just seeing it. I stayed at a small bungalo type hotel near the train station in Aguas Calientes over night. The first day we had a guide. They only work til about noon, really only a couple of hours. You are then on your own to walk around the ruins and/or hike up Huayna Picchu. There is a time limit to going up Huayna Picchu, I think around 1 pm, so that you can make it down by dark and make the train back to Cuzco. Basically, after the tour you have to decide if you want to walk around and see the rest of the ruins OR go to Huayna Picchu. The tour will only take you to the major sites of the ruins and it is a large complex. Staying overnight allows you to do the tour, go up Huayna Picchu, then go see the rest of the ruins. So, that's why I think you don't have to have a guide because we went in on the second day by ourselves. You have to pay the entrance fee each day you go. The entrance fee for tourists is A LOT more than if you are a Peruvian. My advice after having done the trip many times: Take the train from Cuzco (which train depends on your budget and if you want the fast train, the local train or the fancy train), buy some corn on the cob at the train stop in Ollantaytambo, just don't eat the goat cheese they'll give you. Take the tour of Macchu Picchu. Stay overnight in Aguas Calientes (stay at a nice place, it is worth it). This way there is no rush. You can the see the rest of the ruins, and go up Huayna Picchu (this is really excellent). An alternative to going up Huayna Picchu is to go up the mountain opposite the river from Macchu Piccu, on the same side as Aguas Calientes. The view across to Macchu Picchu is different and awesome. Take the train back to Cuzco. This way you get to see everything and enjoy it because you may never get to go back. You can do the above by organizing it yourself. Personally, I would contact a tourist agency such as AFP and have them do the itinerary you want. They really save you a tremendous headache, everything is done ahead of time, and I think it's really just as cheap. The only way to go cheap is to travel with the chickens, not pay for a guide, and do the 1 day slog back and forth. Believe me, you are going a long way to skimp on this part. Take the extra day and enjoy it for just a little more. It would be the equivalent of running up a mountain half way around the world, touching the top and running back down, without ever looking at where you are. Trust me you will lose the whole experience.