One of our big worries about Peru was altitude sickness. Most people who go to Machu Picchu live in Cusco, which is at 3400 meters above sea level, and most people say that coming to Cusco directly from sea level is a pretty painful experience, with head-aches and nausea. Our personal reference point was Mt Fuji, 3800m high, which we climbed a few years ago and had to fight with altitude sickness. We had heard that it can be even worse for small children, so we decided to spend a few days acclimatizing at a lower altitude – Ollantaytambo in the Sacred Valley (at a comfortable 2800m height). And closer to Machu Picchu! And a much nicer place than Cusco (if you ask us).
That strategy worked out really well! We hardly felt anything in Ollantaytambo, and then when we went to Cusco we felt very little – the only thing we noticed was that we ran out of breath more easily when walking up stairs and hills.
After a few days in Cusco we decided to chance it and go to Puno, which is at altitude 3800m on the shore of Lake Titicaca, one of the highest lakes in the world! And, once again, we felt surprisingly OK at that height!
We were hoping to get out to Uros or some of the islands out in the lake, but Dave was sick the first day (fever, not altitude sickness), so we decided to stay in town and take it easy instead. There was a cool dance festival going on (Virgin Candelaria) with thousands of people dancing all over town, so we had some fun just wandering around checking it all the dances and customes. Our only encounter with the lake (other than admiring it) was some fun little swan-shaped paddleboats that we used to chase ducks :)
All in all, Puno was a pretty dirty, run-down town with lots of traffic and little to do. So we agree with what most travel sites say about Puno – use it as launchpad for getting onto the lake, the town itself isn’t too fun to stay in.