Upvote:5
As far as the common Schengen rules go, what is required is (a) that you have concrete and reasonable plans for where you will go when; (b) that you have the means to follow through with those plans; (c) that you document those two facts in your application with any kind of convincing evidence.
Some consulates of Schengen member states apparently have a practice where the only kind of evidence they want to be convinced by are prepaid hotel and transportation reservations. This is not a Schengen-wide requirement, however: it varies from member state to member state and probably also between different consulates from the same state.
Seek out and follow guidance from the particular consulate you need to apply at.
If you need to provide prepaid reservations, using an online service to prepare a fake itinerary and fake reservations is definitely not recommended. That would be fraud, no matter whether you would actually need such reservations, and if found out you might forever jeopardize your chances of being a trustworthy visa applicant. Even if you can't see any difference between the fake reservation and what a real one would look like, and even if the agency swear that their papers have worked for others (but they would claim that, wouldn't they?) your application might be the one where the consulate start recognizing the common signs of using that particular fake-itinerary service.
If you need to apply through a consulate that demands definite reservations and you want to preserve some flexibility, make reservations that allow you to cancel if you change your plans after arriving in the Schengen area.