The Schengen Accord (or Agreement or Acquis) effectively abolishes border controls for the vast majority of those travelling inside the Schengen Area. In mid-2008 this comprised most of Europe.
So many countries belong that it is almost easier to list the exceptions. Switzerland and Liechtenstein are an 'island' in the middle, but are expected to join in November 2008; Britain is a major stand-out (as in so much of the EU); Ireland is effectively outside, except in some technical matters; and the Balkans, south of Slovenia and Hungary but north of Greece, are for the most part 'in waiting' to join the EU and the Schengen area, though a major question mark still hung (at the time of writing) over Serbia, which was almost evenly split between pro- and anti-European Union factions (as was Turkey).
The countries that do belong are, however, an impressive list. As the examples of Switzerland and Liechtenstein illustrate, not all are even in the European Union. Here is a list of the members in May 2008 (the asterisked countries joined in December 2007). Austria; Belgium; Czech Republic*; Denmark; Estonia*; Finland; France; Germany; Greece; Hungary*; Iceland (not in the EU); Italy; Latvia*; Lithuania*; Luxembourg; Malta*; Netherlands; Norway (not EU); Poland*; Portugal; Slovakia*; Slovenia*; Spain; Sweden. Romania and Bulgaria hope to join the Schengen area as soon as possible.
Citizens of countries within the Schengen area do not need visas to travel anywhere in the area. Nor do citizens of countries outside the Schengen area but within the EU, or citizens of a few countries with a right to visa-free entry into the EU.
For those who need one, it is possible to get a Schengen visa which allows you to enter into any country in the Schengen area, and then to travel freely in any other country in the Schengen area. The most usual type is the tourist visa for 90 days.
The problem is that once you are inside the Schengen area with a visa for any one Schengen country, you can pretty much travel from one to another anyway. The only way you are going to be caught out is by a random passport check, which is sufficiently rare as to be a negligible risk -- provided your skin is the right colour, viz., pink. If you are darker skinned than suits the prejudices of any official with whom you have dealings, you may be checked.
There are web-sites charging significant amounts of money for information about Schengen visas. As these are frequently not needed -- many inhabitants of many rich countries don't need visas for much or all of the Schengen area -- and as there are effectively no border controls in much of the Schengen area anyway, you would be well advised to ask yourself whether it is worth the trouble and expense of obtaining a Schengen visa.
If you do need a visa for any of the countries you are visiting, a Schengen visa may make sense. Equally, it may be as easy (and as cost-effective) to get individual visas for one or two countries where you do need them, and not to bother for the countries where you don't.
This is an interesting legal question. Most countries require you to carry some form of identification, but exactly what they require varies widely. In theory, anyone with a legal right of residence in any Schengen country can visit any other Schengen country for up to 90 days. If you can prove (for example) that you have a legal right to residence in France, even though you are a citizen of another EU country, then you should be able to travel anywhere inside the Schengen area -- in theory, without a passport, as long as you have proof of that legal right, such as a French permis de séjour.
Whether theory and practice are in concord is another matter, so unless you have a national identity card from an EU or other Schengen country, it is probably a lot easier and safer to carry your passport with you.
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© 2008 Roger W. Hicks