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If you do go to Europe, I would recommend focusing on the East-European contries and the mediterranean A lot cheaper, and you'll find a lot of intersting history in Greece and Italy especially. And, go in the summer months, between May and September. If you go in the winter time, you might want to make it a skiing holiday and then I'd focus on the alps (austria, switzerland, etc..) and Scandinavia. But be warned, it's ridicoulosly expensive.
Oh, and get a lonely planet guide book on Europe and read the first chapters. Usually explains how you should pack your bags etc.
As for ISIC cards, they are a complete waste. I haven't backpacked europe tough, but I can tell you that they are completely useless in South East Asia, Oceania and Central America.
As for getting a backpack .. I can recommend getting a 70 liter one. Mine was 90, and I always had plenty room. I had a Karrimor backpack and was very happy with it. The most important thing is that it is comfortable to wear and that it can be zipped up all the way, it's hassle to pack everything from the top. Oh, and you'll probably never going to carry it for more than one hour, so it won't be necesarry to get those trekking packs.
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