One thing is: I wouldn't recommend going through Milton. My parents live in Milton and I biked there once from Toronto. Most of the route was quite all right, but one can't avoid several km of narrow and fast two-lane country roads... I would in particular advise that you steer clear of Derry Rd. For the most part it is narrow, and the cars are travelling at 90+ km/h.

Waterdown might be a different story though. I've never been there, but it looks much smaller...

I actually have cycled all the way from Toronto to Kitchener (and past) last summer. Didn't find the traffic too bad. Let me dig up some old maps so that I can reconstruct the route...

Edit: Hmm, can't seem to find it... Here is what I remember. I took Matheson Rd. in Mississauga (goes west through industrial area, and was very quiet on the Sunday morning of my ride). Then rode north on one of the major Mississauga arterials. Now, one CAN pick mostly quieter residential streets to go through a lot of Mississauga, I just wanted something faster (and again, Sunday morning didn't present much challenge traffic-wise). Then I believe I took Queen St./5th Sideroad. Then Main St./8th Line north, then 1st Line north, then Arkell Road west.

Then I made my way through Guelph (one can avoid it if one wants to, but I was stopping there on that tour). That is pretty close to Kitchener already and the rest probably depends on what part of Kitchener you want to end up in. I know we have at least one forum member here from the Kitchener-Waterloo area (sgtsmile) - it might be good idea to ask him about the best roads there.

I am neither recommending nor cautioning against the route I took. There probably are better ways to cycle there and there probably are worse ways. But when I did this ride over two days (Sunday and Monday) I didn't at any point feel too overwhelmed with traffic or have any close calls with cars. If you have control over this, I would probably recommend cycling on the weekend, especially within, say, 40-50 km of Toronto.