Butterworth is pretty near to the Thai border already. The main attraction of this place would be either Penang or Langkawi. Butterworth is actually part of Penang, but on mainland Malaysia...

There is a very frequent ferry service from Butterworth onwards to Penang for a very very cheap price... Probably be staying 2 nights in Penang and 2 nights in Langkawi before heading off to Hat Yai, cross the thai border.. To more beach resorts!!

Will be staying at the Hong Ping Hotel which is a popular backpackers place right in the middle of town..  http://www.penangnet.com/hongping/

At Langkawi, i will be staying at the Zackry Guesthouse - http://www.hostelz.com/hotel/3721-Zackry-Guesthouse .. 2 nights would be 8 USD :) Very cheap!! :)

My first stop from the train would be Kuala Lumpur. Kualu Lumpur has 3 sectors which has the highest concentration of Hostels. They are Chinatown, Puduraya, and Bukit Bintang. According to most guides, Bukit Bintang is the best place to stay in KL and is the main place for backpackers in KL. There are alot of Major shopping malls around with lotsa hawkers for food.

I've decided to stay here in KL. http://www.redpalm-kl.com/ Its a 5 minutes walk to the monorail, so the train station and stuff are easily accessible. Costs $11 SGD per night there. Very good price!

Things to do in KL
1. EAT!!
2. Check out the usual stuff like Petronas Towers, KL Tower
3. KL Lake Garden
4. Jalan Petaling Night Market

I will be spending total 2 nights at KL. Might be going Cameron Highlands after KL before hopping back on the train...