This is a recent article from MSN's homepage detaling the best  scenic drives in the country.  Our California coastal drive ranked number 3. 

"California's State Route 1 (aka Highway 1) skirts the Golden State's glorious Pacific coastline from "So Cal" near San Luis Obispo northwest to the forests of Monterey. While the twists and curves, and occasional precariously-perched cliff-top road, may prove challenging at times (one section has been ominously dubbed Devil's Slide thanks to landslides and erosion that have occasionally made the road impassable), the magnificent vistas of ocean waves breaking on rocky sea-sculpted shores, windswept beaches dotted by frolicking otters or sea lions, and magnificent forests presiding above it all can rouse even the wariest of drivers behind the wheel. Forays into charming little coastal towns, like Carmel-by-the-Sea and Laguna Beach, as well as into the trilogy of Californian cultural centers at Los Angeles, San Diego and San Francisco, are met by attractions ranging from historic missions to magnificent mansions (don't miss San Simeon's mountaintop Hearst Castle). There are also endless opportunities for outdoor recreation, particularly around the Big Sur area, where you can hike through redwood forests, comb the beaches for shells and jade, and camp under the stars."

We have traveled this road a few times and can attest to its beauty.  Other notable places to stop by:  Avila Beach, Morro Bay, Cayucos and Cambria.  Cambria, where the pines meet the sea, is one of our favorite places.  Stroll around the quaint downtown and visit small local shops and eateries.  We love Robin's restaurant and dessert at Linn's-the best berry pie this side of homemade.  It's an artist community and has a plethora of wonderful art galleries.  

If you have time, from Morro Bay take Highway 41 over to Paso Robles for some wine tasting.