Let’s get to the point straightaway.
Where to buy your railpass: Most railpasses have to be bought in the U.S. and are not available in Europe. There are some exceptions though. Eurailpasses are sold at some of Europe's major railway stations for 10 - 20% more than the U.S. price. Some local passes are available only in Europe.
When to buy your railpasses: Most passes can be purchased anywhere from six months in advance (if you're sure of your plans) to one week ahead (allow five business days for delivery from ETBD). Pass prices may fluctuate during the year based on the dollar-euro exchange rate (and other variables) and are subject to change without notice. Rates can vary between sales agents, too.
The $U.S. price you pay will be locked in at the time of payment or ticketing, much like an airline ticket, and this rate remains in computer records of your purchase. Your printed pass, however, may show the price in euros only. After you buy a pass, you have six months to validate it in Europe. Since railpass prices usually go up every January regardless of exchange rates, those traveling in the first half of 2008 will probably save 5% or so by buying in December 2007.
Who can use these railpasses: Most railpasses sold in the U.S. cannot be used by residents of Europe. You are not a resident of Europe if you live on an American military base or have only a temporary student visa for Europe. You must provide proof of at least 6 months residence outside Europe (and outside the Russian Federation, Turkey, or North Africa) when validating most railpasses. A passport or green card is the usual proof.