So, to me less downtime is NOT very realistic, but my players SOOOOOOO prefer this way over the other... and I tend to listen to them!
Well that's certainly understandable. But you know, it's not as if you *have to* roleplay all that downtime either, not if there's nothing happening. After all, it's not as if you roleplay every time they brush their teeth or go to the privy.
If you don't, the only difference it makes is 1) how much money/other resources they have used due to that downtime before they set out once again, and 2) how cold the trail is they were on when they were wounded. If your players (and you) are imaginative enough and patient enough, you can actually add to the fun by making them work around the problems of a cold trail. That all depends on how much you and your players want combat scenarios to dominate the game (always a problem in nearly any RPG). Sometimes it's good to have the fighters step back and let the thinkers have a turn.
For that matter, they can use that downtime to be better prepared for the next time out. Libraries are good places for spellcasters to spend recovery time, just as the fighters can gather gossip at the local forge, the thieves can gather gossip at the local pub and the bard can go try for a gig at the local Lord's castle. That is a golden time for the GM to fill them up with innuendo, local prejudice and half-truths about their potential target.
You can also point out that hey, you know that chain shirt you were thinking of buying? Ya know how it doesn't really fit all that well? Go to the armorer's twice a week for the next 3 weeks so he can fit you, and it WILL fit that well.
By all means, keep your players having fun. After all, that's the whole point. Nonetheless, don't think that "downtime" automatically equates to "dead time". It only does if you let it.
