Wilma, We "did" this kind of trip a couple of years ago now, flew to Cape Town, then drove up through the wine regions to Ooutsdoorn (Not sure of spelling) and then back down the garden route, stopping off in Mossel Bay (Shark cage diving) back to Cape Town. Then flew up to Johannesburg for a day and onto Sun City for a couple of nights, then into Pilanesburg National Park for a couple of nights doing a safari.
In Cape Town we stayed at the Holiday Inn Waterfront (not exactly the V&A Waterfront, a five minute drive) which was very resonable taking into account the exchange rate of Rand to £. I was pleasantly surprised that due to the exchange rate we stayed in some great places that would cost an arm and a leg here in the UK.
Accommodation around the wine region and garden route I literally just looked on the internet, you'll be surprised at the amount of places available for every budget. Also check out the Greenwood Guide (they will give you details on quite unusual places to stay)
For our trip I bought a map of South Africa and worked out how much we wanted to drive every day, places that we wanted to visit (i.e. the Cango Caves are a great place to visit) and just took it from there.
The roads are great, so for me driving was an absolute pleasure, not forgetting how cheap fuel is.
Depending on how long you stay in the Cape Town area, don't forget a visit to Table Mountain, a trip out to Robben Island, a drive down to Boulders Beach/Simon's Town and out to Cape of Good Hope. Scoya.